Foreclosure Decline Causes Inventory to Stay Flat

The number of foreclosures in the U.S. per month decreased from 83,000 in September 2011 to 57,000 in September 2012. This signifies improvement in the housing market, but there is still a long way to go before we have completed recovered from the housing meltdown in 2008. Before September of 2008 the number of foreclosures in the U.S. per month was 21,000.

Home foreclosures fell in September, pushing the nation’s inventory of distressed properties lower. Still, America is a long ways off from foreclosure activity levels set before the housing crisis. Total inventory, as a result, is not shifting greatly.

The number of completed U.S. foreclosures reached 57,000 in September, down from 83,000 a year earlier and slightly lower than August levels, CoreLogic said.

A month earlier, the nation saw 59,000 foreclosures, suggesting distressed activity levels continued to subside last month.

In the years leading up to the housing meltdown, foreclosures averaged 21,000 per month. That figure is still a long ways off with today’s foreclosure pace well above the 50,000 foreclosures a month pace, according to CoreLogic.

In the past four years, the nation lost 3.9 million properties to foreclosure. By September, 1.4 million homes, or 3.3% of all mortgaged real estate, remained in the foreclosure inventory. That compares to 1.5 million in the pipeline a year earlier.

For the last year, the rate of homes in foreclosure did not shift much, as a total. For example, in August 2011, about 1.3 million homes, or 3.2% of all homes with a mortgage, sat in foreclosure inventory. That inventory rate did not change year-over-year when looking at August 2012 data.

“The continuing downward trend in foreclosures along with a gradual clearing of the shadow inventory are signs of stabilization and improvement in the housing market,” said Anand Nallathambi, president and CEO of CoreLogic.”Increasingly improving market conditions and industry and government policy are allowing distressed homeowners to pursue refinancing, loan modifications or short sales rather than foreclosures.”

September foreclosures fell 50% from the peak reached in September 2010 and remain 22% lower when compared to the start of 2012.

“While there is significant progress to be made before returning to pre-crisis levels, the trend is in the right direction as short sales, up 27% year over year in August, continue to gain popularity,” added Nallathambi.

You can see how much progress the U.S. has made, and how much more progress the U.S. needs to make. In order to recover from the housing crash in September 2008 the U.S. still needs to decrease these numbers about 36,000, but at least we are headed in the right direction.

Source: HousingWire

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