Foreclosure filings – including default notices, scheduled auctions and bank repossessions – were reported on 1,117,426 U.S. properties in 2014, down 18% from 2013 and down 61% from the peak of the recession in 2010, when there were 2,871,891 properties with foreclosure filings, RealtyTrac reports.
It was the lowest annual total since 2006, when there were 717,522 properties with foreclosure filings nationwide.
About 0.85% of all U.S. housing units (one in every 118) had at least one foreclosure filing in 2014, according to RealtyTrac's year-end foreclosure report. It was the first time since 2006 that the annual foreclosure rate fell below 1% of all housing units.
‘The U.S. foreclosure numbers in 2014 show a foreclosure market that is close to finding a floor and stabilizing at a historically normal level,’ says Daren Blomquist vice president at RealtyTrac, in a statement. ‘But a recent surge in foreclosure starts and scheduled foreclosure auctions in several states in the last few months of 2014 indicate that lenders are gearing up for a spring cleaning of deferred distress in the first half of 2015 in some local markets.’
Although the national foreclosure rate continued to fall in 2014, the past two months paint a different picture: U.S. foreclosure starts in December increased 6% compared to November to reach a 17-month high of 59,358. That's up 14% from a year ago.
States that saw the biggest year-over-year increases in foreclosure starts in November included Massachusetts (up 323%), New Jersey (up 262%), Nevada (up 194%), Missouri (up 88%) and New York (up 33%).
‘The December surge in foreclosure starts is not a cause for concern, as it comes from a previously existing supply of distressed properties,’ explains Andres Carbacho-Burgos, senior economist at Moody's Analytics. ‘The national pool of distressed mortgages has not increased despite the surge in foreclosure filings.
‘The geographic location of the surge in foreclosure starts is not surprising,’ Carbacho-Burgos adds. ‘The list of states with increased activity in the last months of 2014 includes those with judicial foreclosure backlogs such as Massachusetts, New Jersey, Pennsylvania and New York. Nevada is also not a judicial state but still has a substantial pool of seriously delinquent mortgages relative to the years before the housing crisis.’
Despite the annual increase in foreclosure starts in December and November, foreclosure starts for all of 2014 were still down compared to the previous year. A total of 643,193 U.S. properties started the foreclosure process in 2014, down 14% from 2013 and down 70% from the peak of 2,139,005 foreclosure starts in 2009.
Foreclosure starts in 2014 were at the lowest annual total since RealtyTrac began issuing its annual foreclosure report in 2006, the firm adds.