Foreclosure Rates Decrease in September

By Stevie Duffin Updated on 12/14/2012

By Daniel Duffield

In September, the U.S. inventory of defaulted properties declined as home foreclosures decreased. While indicating some progress, the nation has yet to reach the low foreclosure rates prior to the housing crisis, and total inventory has not made any large movement.

According to Corelogic statistics, completed U.S. foreclosures hit 57,000 during September, dropping from the previous September’s rate of 83,000 and decreasing somewhat from August measurements of 59,000.

Before the collapse of the housing market in 2009, foreclosure rates averaged 21,000 monthly, dramatically lower than current foreclosure statsitics, according to Corelogic.

Within the last four years, the U.S. has seen 3.9 million foreclosed homes, and in September, approximately 1.4 million homes remained in the foreclosure inventory, totaling 3.3% of all real estate currently under mortgage. This rate shows a noticeable decrease from last year’s 1.5 million in inventory.

 During the last year, foreclosure rates have remained mostly constant, with minimal movement. For instance, August 2011 statistics indicated roughly 1.3 million foreclosed homes, or 3.2% of all mortgaged homes. When examining this rate with August 2011, the inventory rate showed little change.

According to Anand Nallathambi, president and CEO of Corelogic, the persistent downward movement of foreclosure, combined with the gradual but continuous shrinking of the shadow inventory, indicate some improvement and recovery within the U.S. housing market. With these more advantageous market conditions, along with incredibly low mortgage rates, concerned homeowners have been able to refinance, sell short, or seek loan modification, rather than foreclosing.

In terms of foreclosure rates for the month of September, foreclosures have declined 50% since the peak in September 2010 and 22% since the beginning of 2012.

Although achieving pre-crisis levels of foreclosure will require a substantial amount of progress, Nallathambi believes that the current trends are pushing the market in the right direction, with short sales increasing in popularity and rising 27% in August compared with the previous year.