Getty Images Some good news for a sluggish housing market: The rate of foreclosures returned to levels not seen since before the housing market crash.
Some 106,866 U.S. properties had new foreclosure filings in September, down 9% from the previous month and down 19% from a year ago. This marks the lowest level since July 2006 — making it a 98-month low, according to data released Thursday by real-estate website RealtyTrac. September also marked the 48th consecutive month where U.S. foreclosure activity decreased on a year-over-year basis.
For the third quarter of 2014, data was not quite as positive. Total foreclosure filings — including default notices, scheduled auctions and bank repossessions — were reported on 317,171 U.S. properties, down 16% from a year ago but up by 0.4% from the previous quarter — the first quarterly increase since the third quarter of 2011. Default notices in the third quarter increased from a year ago in 10 U.S. states.
That said, even the recent rise in scheduled foreclosure auctions in many markets shows lenders are continuing to clean house of lingering delinquent loans, says Daren Blomquist, vice president at RealtyTrac. “This rise in scheduled auctions foreshadows a corresponding rise in bank repossessions and auction sales to third-party buyers in the coming months,” he says.
The reduction in foreclosed homes is good for everyone. Foreclosed homes not only are more likely to fall into disrepair, but might reduce the value of nearby homes. On average, each foreclosure that takes place within 0.05 miles of a house lowers the price of that house by about 1%, according to a study released by the Joint Center for Housing Studies at Harvard University.
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