U.S. Foreclosures Drop to a Level Last Seen in 2006
RealtyTrac's new Year-End 2014 Foreclosure Market Report shows that U.S. foreclosure filings were reported on 1,117,426 properties in 2014, down 18 percent from 2013 and down 61 percent from the peak in 2010. The number represents the lowest annual total since 2006, when 717,522 properties had foreclosure filings nationwide.
The report also shows that 0.85 percent of all U.S. housing units -- one in every 118 -- had at least one foreclosure filing in 2014, the first time since 2006 that the annual foreclosure rate had fell below 1 percent of all housing units.
The numbers show "a foreclosure market that is close to finding a floor and stabilizing at a historically normal level," said Daren Blomquist, a RealtyTrac vice president.
However, the housing market isn't doing cartwheels just yet. After 27 consecutive months of decreases, U.S. foreclosure starts in December increased 6 percent from the previous month and 14 percent from a year ago -- the second month in a row that showed increases.
December foreclosure starts increased from a year ago in 26 states, including Massachusetts (up 323 percent), New Jersey (up 262 percent), Nevada (up 194 percent), Missouri (up 88 percent) and New York (up 33 percent).
Blomquist said that a year-end surge in foreclosure starts and scheduled foreclosure auctions indicate that lenders in some markets are gearing up for "a spring cleaning of deferred distress" properties in the first half of 2015. This could flood some local markets with distressed sales and impact home prices.
This recent uptick largely reflects failed attempts to rescue distressed properties, rather than new loans going bad, he said. "Many of these properties have been in mediation, loan modification, efforts to try to prevent foreclosure. Unfortunately for some of these homeowners, none of those solutions stuck, so they're finally going into foreclosure ... casting a lingering shadow on the housing market."