Falling Foreclosure Rates Represent A Housing Market That’s Bouncing Back

by James F. McClister

New CoreLogic report finds that even though foreclosures are still around, their presence is much less pronounced.

In 2013, foreclosures were at the epicenter of the housing conversation. However, after a year of tirelessly closing short sales and pushing foreclosures to completion, their presence in most of the country’s biggest markets have been reduced to just another metric of success and sustainability, according to CoreLogic’s recently released July National Foreclosure Report.

In Chicagoland, the foreclosure rate continues to dwindle, falling to 2.6 percent in July, a 1.6 percent decline year-over-year. In the last 12 months, the city has completed nearly 12,000 foreclosures. Still, Chicago foreclosures remain slightly above the state’s 2.3 percent foreclosure inventory.

Rates Are Dropping Nationally, As Well

Nationally, the report confirmed, foreclosures are similarly falling from the prominence they once enjoyed during the immediate aftermath of the burst housing bubble. Research found:

  • Month-over-month, completed foreclosures fell by 8.5 percent from the approximately 49,000 reported in June.
  • July’s overall foreclosure inventory in the U.S. stood at just about 640,000 homes, which is a 34.4 percent year-over-year decrease.
  • Approximately 5.1 million foreclosures have been completed throughout the U.S. since September 2008.

It’s All Downhill From Here

If you can draw any conclusions from CoreLogic’s July report, it’s that the burden of foreclosures is growing exponentially less the farther removed we are from the financial crisis.

“The stock of distressed debt continues to rapidly decline, especially in western states,” Sam Khater, deputy chief economist for CoreLogic, says. “The number of seriously delinquent loans fell by more than 25 percent from the prior year in 10 states and seven of those states were in the west.”

Going by CoreLogic’s figures and current trends, CEO Anand Nallathambi estimates that the overall foreclosure inventory could get down to as low as 500,000 homes by the end of the year, which, he says, would be “very positive news for the housing market.

“The picture is considerably brighter in the non-judicial states, which maintain consistently lower foreclosure stocks and, in general, lower levels of serious delinquency,” he admits. “In total, there are now 36 states with an inventory of foreclosed homes lower than the national rate of 1.7 percent.”

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