Recent statistics show good news for homeowners and those in the market for a home: foreclosure rates across the country fell in July, showing an improvement in both monthly and annual statistics.
Despite slow growth in the economy overall, it seems that things are looking up in the housing market. Data tracking company CoreLogic has recorded approximately 58,000 foreclosures in the month of July. While this probably sounds like a lot, the number of foreclosed homes has fallen from 62,000 in June and from nearly 69,000 in July of last year. This is a 16 percent drop between the two years, definitely a number worth investigating.
Indeed, a closer study shows that 1.3 million properties were in foreclosure status—that’s 3.2 percent of all homes with an existing mortgage. This is slight improvement form the same statistic from the following year, which showed 1.5 million homes (at 3.5 percent of the total mortgage market) in foreclosure status within the system.
CoreLogic president and chief executive officer, Anand Nallathambi, said
The decline in complete foreclosures is yet another positive signal that the housing market is continuing on a progressive path of stabilization and recovery.
Obviously, this is a very good sign during a time when a little good news is certainly a welcomed surprise. These numbers also indicate that other areas of the mortgage industry are improving as well. Nallathambi goes on to say,
Alternative resolutions are helping to reduce foreclosures and often result in a more positive transition for the borrower and lower losses for investors and lenders.
Even with promising numbers such as this, the mortgage industry is not quite out of the woods yet. For example, not all areas of the market experienced the same kind of growth. As a matter of fact, almost half of the completed foreclosures mentioned came out of the statistics of just five states: California, Florida, Georgia, Michigan, and Texas (accounting for 48.1 percent of July foreclosure closings). It should come as no surprise, then, that these five states also secured the most foreclosures over the past 12 months. Perhaps it most obvious that California listed the most foreclosures (with 118,000) followed by Florida (92,000).
It is also, however, important to look at areas of the country that are not experiencing the same problematic systems. The five areas of the United States listing the fewest foreclosures, for example, were South Dakota (with a measly 32 foreclosures) and Washington, D.C. (with only 120). Hawaii listed 445 foreclosed properties while North Dakota and Maine listed only 1200 combined (575 and 608, respectively).
While these numbers certainly indicate that the recession may soon be at an end, these statistics show something even more important. An overall reduction in foreclosure numbers across the country could be a sign that the average consumer has improved the way they responsibly handle their personal finances. This is exceptionally good news after a short period of reckless lending from banks thanks to loose regulations from a previous presidential administration. As Americans scramble to pick up the pieces, the struggle has helped educate many people, albeit the hard way, about the importance of proper money management.
Furthermore, the present state of affairs in the mortgage industry also shows that the average consumer not only has this better understanding but is much better at paying their bills on time. This is especially impressive since recent settlement disputes between banks and certain states’ attorneys general have not resulted in a numbers surge as many experts have expected. Instead, the constancy in the numbers reflects a new state of normalcy amongst more responsible consumers in today’s financial climate.