Foreclosure activity grew in May, up 9% from April for a total of 205,990 filings, according to data released today by RealtyTrac. The rise came both from starts and bank repossessions, which grew on a monthly basis by 12% and 7%, respectively. Still, activity was down 4% on an annual basis.
"U.S. foreclosure activity has now decreased on a year-over-year basis for 20 straight months including May, but the jump in May foreclosure starts shows that it’s going to be a bumpy ride down to the bottom of this foreclosure cycle," said Brandon Moore, CEO at RealtyTrac, in a statement. "Based on the rise in pre-foreclosure sales we’ve seen so far this year, a higher percentage of these new foreclosure starts will likely end up as short sales or auction sales to third parties rather than bank repossessions going forward."
Pre-foreclosure sales have been rising quickly in recent months. According to Daren Blomquist, vice president at RealtyTrac, in most months since January 2007, only about 20% of properties that received a foreclosure filing ended up in a pre-foreclosure sale. During the first quarter of this year, however, that number jumped to 42%. Blomquist anticipates the ratio of pre-foreclosure sales to REOs will eventually shake out to around 50/50.
Claire Easley is senior editor–online at Builder.
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