Foreclosures Drop to Lowest Levels Since 2007
The new year is bringing in a lot of hope for the housing market. Foreclosure filings, which indicate repossession of homes because of missed mortgage payments, dropped to their lowest levels since 2007. That’s a sign that the housing market is rejuvenating and recovery is in full swing.
Last month, default, auction and repossession notices slipped 1 percent compared to the previous month, according to RealtyTrac. Compared to a year ago, numbers are down 28 percent. There’s also a 26 percent decrease in foreclosure notices compared to 2012, with 1.36 million homes receiving foreclosure notices. Compared to the 2010 peak in such notices, numbers are down 53 percent.
According to Bloomberg, increased buyer demand and a squeeze in inventories is helping homeowners duck the foreclosure process by selling their homes and allowing banks to dispose of repossessed homes at good prices. Demand is fueling price increase.
Home prices jumped 12 percent in November compared to a year ago, according to CoreLogic.
“Banks are poised to liquidate their lingering inventory as the housing market improves,” Daren Blomquist, vice president at RealtyTrac, told Bloomberg. Blomquist said that if the decline in filings continues at the current rate, by next year foreclosure notices should fall back to the pre-bust levels of 2006. But the troubled times are not yet over for many regions.
Last year, Florida had the highest foreclosure rate with more than 3 percent of households receiving a filing, followed closely 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 Bloomberg. There were states which saw triple-digit jumps in filings, such as Maryland, which saw a 117 percent increase. New Jersey had a 44 percent jump, New York 34 percent, and Connecticut 20 percent.
Home Builder Confidence Dips in January
The chilling winter months cooled down builder enthusiasm in January. According to the National Association of Home Builders/Wells Fargo, the builder sentiment index fell to 56. That’s one point down from December’s reading of 57, which was revised one point lower from the original estimate. A measure of more than 50 is generally considered to be an indicator of a healthy market.
Compared to December, all three measures of the index dropped: builders’ outlook on sales conditions for single-family homes, their view on sales over the next six months, and their perspective on prospective buyers.
The NAHB said that despite the drop in the index, builders are generally upbeat ahead of the very important spring home-buying and selling season. Overall, the index is nine points higher this month compared to a year-ago period. That’s great news considering that the spring buying season kicks off next month.
Housing Bust Affected Hispanics, Blacks Most
The boom and bust in home values disproportionately hurt black and Hispanic homeowners, according to Zillow.
The hardest hit were Hispanic communities, with home values in those neighborhoods declining an average of 46 percent from the height of the bubble to the bust.
Predominantly black neighborhoods saw values fall 32.3 percent in the same time period, according to USA Today. In comparison, largely white communities saw a 24 percent decline in values while Asian communities experienced a 20 percent drop.
The good news is that even though Hispanics were the hardest hit, they were also the fastest to recover, according to the paper. Home values in Hispanic communities jumped more than 25 percent from the bust levels, compared with an only 13 percent increase in black communities, according to Zillow.
Read More: realestate.com