RealtyTrac: U.S. Foreclosure Rate Increased 2% In May

Posted by Patrick Barnard on June 13, 2013 No Comments
Categories : Residential Mortgage

After hitting a 74-month low in April, foreclosure activity increased 2% in May, according to RealtyTrac's U.S. Foreclosure Market Report.

Altogether, 148,054 U.S. properties saw foreclosure actions – including default notices, scheduled auctions and bank repossessions – in the month of May. Foreclosure activity increased in 33 states.

Despite the 2% increase, foreclosure activity is down 28% compared to May 2012.

Driving the increase was an 11% month-over-month increase in bank repossessions. Real estate owned (REO) activity increased 9% in non-judicial states and 13% in judicial states. However RealtyTrac noted that overall REO activity was down 29% from May 2012.

States with the largest increases in REO activity in May included North Carolina (60%), Oregon (57%), Wisconsin (44%), Illinois (44%), Colorado (23%) and Michigan (19%).

Foreclosure rates continue to be higher in judicial states. In fact, five of the top six states for foreclosure rates – Florida, Ohio, Maryland, South Carolina and Illinois – are judicial states. Nevada's foreclosure rate was ranked highest among non-judicial states.

In what might be interpreted as a disturbing trend, Daren Blomquist, vice president at RealtyTrac, said foreclosure rates increased in states that up until recently had been successfully holding foreclosures down using various prevention measures.

"Places like Nevada, where foreclosure starts increased to a 20-month high, and Maryland, where overall foreclosure activity increased to a 33-month high,’ he said. ‘Still, the emerging housing recovery has strengthened most local markets enough to quickly shake off a few more blows from these nagging foreclosures."

Many of the homes that were foreclosed in May entered the often lengthy process at some point last year.

The report shows that the number of homes entering the foreclosure process is currently increasing. Foreclosure starts rose 4% from April, according to the report, but were down 33% compared to April 2012.

Interestingly, the increase in the foreclosure rate comes as the U.S. housing market is turning a corner, propelled in part by growing demand for homes at a time when inventories are down in many markets.

Home prices increased 12.1% in April compared to a year ago, the biggest gain since February 2006, according to CoreLogic.

RealtyTrac's U.S. Foreclosure Market Report for April showed that foreclosure filings were reported on 144,790 properties, a decrease of 5% from March and down 23% from April 2012.

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