Foreclosure Rate Falls to New Post-Crisis Low
Need further proof that the housing crisis is over? CoreLogic’s April 2016 National Foreclosure Report provides it.
The nation's foreclosure rate and serious delinquency rate in April both fell to post-crisis lows amid home price appreciation and labor market improvements, according to data released byCoreLogic on Tuesday.
CoreLogic found that foreclosure inventory, or the number of residential homes that are in some state of foreclosure, declined by 23.4 percent over-the-year to about 406,000 homes—representing about 1.1 percent of all homes with a mortgage. The 1.1 percent foreclosure rate is the lowest for any one month since September 2007.
The number of seriously delinquent mortgages—mortgages 90 days or more overdue or in foreclosure or REO—fell by 21.6 percent over-the-year in April down to about 1.1 million mortgages, representing about 3 percent of all homes with a mortgage. The 3 percent serious delinquency rate is the lowest for any one month since October 2007.
“The recovery in home prices and improved labor market have contributed to the drop in seriously delinquent rates,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Over the 12 months through April, the CoreLogic Home Price Index for the U.S. rose 6.2 percent and the labor market gained 2.6 million jobs. We also found that the seriously delinquent rate fell by about three-quarters of a percentage point.”
The number of completed foreclosures for April totaled approximately 37,000, which is a decline of about 15.8 percent from April 2015’s total of 43,000. While 37,000 foreclosures in one month is nearly a 70 percent decline from their peak of 118,000 in September 2010, it is still elevated from the pre-crisis monthly average of about 21,000 from 2000 to 2006.
About 6.2 million homes have been lost to foreclosure since September 2008, when the financial crisis began. Since homeownership rates peaked in 2004, about 8.3 million homes have been lost to foreclosure.
“The number of homeowners who have negative equity has fallen by two-thirds since its 2010 peak, and the number of borrowers in foreclosure proceedings has also continued to drop,” said Anand Nallathambi, president and CEO of CoreLogic. “Despite this progress, about four million homeowners remained underwater at the end of the first quarter, and these borrowers are more vulnerable to foreclosure proceedings if they should fall delinquent.”
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