Foreclosures Rise Even As Housing Market Heats Up
The number of homes repossessed by lenders rose in May, according to foreclosure data company RealtyTrac, as did foreclosure starts and filings, an indication that banks want to take advantage of rising home prices to push out their inventory.
In May, bank repossessions grew to 39,000, up 11 percent from April, with 33 states posting increases. North Carolina had the biggest monthly gain with a 60 percent increase in May, followed by Oregon with a 57 percent leap and Wisconsin and Illinois with a 44 percent increase each in repossessions.
Foreclosure starts also increased across the country, rising 4 percent from April. Compared with last year however starts are still down 33 percent. One in every 885 U.S. households underwent some form of foreclosure action in May with total foreclosure filings, including default notices, scheduled auctions, and bank repossessions rising 2 percent in May to 148,054. That reversed a long downward trend and inched back up from April’s 75-month low. Still, filings in May were down 28 percent from May 2012.
Many banks may be eager to push forward on their foreclosure backlogs as home prices continue to rise quickly and inventory has been depleted. Distressed properties are in great demand in the markets now, something that hasn’t been the case since the beginning of the Great Recession.
By state, Florida had the highest foreclosure rate with one in every 302 households receiving a filing in May, but foreclosures starts dropped 17 percent from the year before. Nevada’s rate was a close second with filings going out to one in every 305 households. Foreclosure starts there jumped 81 percent from May 2012. Third was Ohio with a foreclosure rate of one out of every 584 households.
“Foreclosure activity continued to bounce back in some markets where it may have appeared the foreclosure problem had been knocked out by an aggressive combination of foreclosure prevention efforts over the past two years,” said Daren Blomquist, RealtyTrac vice president in a press release, but he added, “the emerging housing recovery has strengthened most local markets enough to quickly shake off a few more blows from these nagging foreclosures.”
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