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July 28, 2014

Foreclosures at Lowest Level in 7 Years

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Foreclosures at Lowest Level in 7 Years

In June, lenders initiated 57,286 foreclosures — the lowest level for any month in 7.5 years, RealtyTrac Inc. reported Thursday. Foreclosure starts are at an 800,000 pace for this year, down from 1.1 million last year. 

The housing market continues to pick up nationwide, and the drop in foreclosures is helping to keep home prices higher. CoreLogic reported recently that home prices jumped 12.2 percent in May from a year earlier, which was the largest increase in seven years.  

"Halfway through 2013, it is becoming increasingly evident that while foreclosures are no longer a national problem, they continue to be a state and local market problem," says Daren Blomquist, a vice president at RealtyTrac.

Foreclosures remain elevated in some states, such as Florida, Nevada, Illinois, and Ohio. 

About 75 percent of homes in the foreclosure process as of June have mortgages that were originated between 2004 and 2008, according to RealtyTrac.

"That's a good sign that the lending has much improved and we're not seeing high foreclosure rates on mortgages that have been taken out since 2008," Blomquist says.

In June, lenders repossessed 35,507 homes — down nearly 9 percent from May and down 35 percent from a year ago, RealtyTrac reports. Blomquist says that about 25,000 repossessions a month is considered more “normal” for the housing market. Still, the numbers are far below the peak reached in September 2010 of 102,000, according to RealtyTrac. 

Source: “Foreclosures hit lowest level since 2006,” The Associated Press (July 11, 2013)

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