Foreclosure filings dropped in 2013 to the lowest level since 2007, RealtyTrac reports. Filings across the three stages of the foreclosure process fell 26% from 2012. Approximately 1.04% of U.S. households recorded a foreclosure filing, compared with 1.39% in 2012. Foreclosure starts declined 33% and bank repossessions fell 31%, reaching their lowest level since 2007. Fewer households are falling into delinquency or defaulting on mortgages, resulting in fewer foreclosure filings.
Regionally, Florida recorded the highest foreclosure rate in 2013 at 3.01% of total housing units. Nevada came in second at 2.16%, followed by Illinois with 1.89%.
Foreclosure inventories also declined 22% from 2012 to 2013 and are down around 44% from their peak in late 2010. The foreclosure overhang continues to fade and the housing market’s normal supply and demand dynamics are returning. House prices are trending higher across the country and will help limit future foreclosure filings as fewer homeowners see their home values fall below their outstanding mortgage debt. Both foreclosure filings and inventories will trend lower over the next several years.
Brent Campbell is an Assistant Economist at Moody's Analytics.
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