Foreclosures Fall to Lowest Since '07 As Housing Demand Rebounds
Foreclosure filings fell last month, capping a year in which the number of homes in the repossession process dropped to the lowest level since 2007 amid rebounding U.S. property prices.
Default, auction and repossession notices in December fell 1 percent from the previous month and 28 percent from a year earlier, RealtyTrac said in a report Thursday. About 1.36 million U.S. properties received foreclosure notices last year, a 26 percent decrease from 2012 and 53 percent plunge from the peak in 2010 when 2.9 million properties got filings. One in 96 households received at least one notice during the year, according to the Irvine, Calif.-based data seller.
Strengthening buyer demand and tight inventories of available properties are helping troubled homeowners avoid foreclosure by selling and allowing banks to dispose of seized houses. U.S. home prices in November gained almost 12 percent from a year earlier, data from Irvine-based CoreLogic showed last week.
"Banks are poised to liquidate their lingering inventory as the housing market improves," RealtyTrac vice president Daren Blomquist said in a telephone interview. At the current pace of the decline in filings, notices should recede to the precrisis levels of late 2006 by early next year, he said.
States where courts oversee repossessions will have the bulk of properties taken back by lenders or bought by investors at auction this year, Blomquist said in the interview. Auction filings were the only type of foreclosure notice to increase in 2013, with a 107 percent jump in Maryland, 64 percent in New Jersey, 55 percent in Connecticut and 53 percent in Florida, RealtyTrac said.
Florida had the highest foreclosure rate in 2013, with more than 3 percent of households receiving a filing, followed by Nevada at almost 2.2 percent, Illinois at 1.9 percent, Maryland at almost 1.6 percent and Ohio at more than 1.5 percent, according to the data company.
Filings jumped 117 percent in Maryland, 44 percent in New Jersey, 34 percent in New York, 20 percent in Connecticut and 13 percent in both Washington and Pennsylvania, RealtyTrac said.
Higher home values and changes in the way banks document foreclosures after a $25 billion settlement with U.S. attorneys general in 2012 are likely to smooth the repossession process this year, Blomquist said.
"It makes more sense to sell those properties when prices are higher, and courts and banks have finally got their act together to have the proper paperwork," he said.