CoreLogic® (NYSE: CLGX) reported Tuesday that national foreclosure inventory declined by 25.9% and completed foreclosures declined by 4.9% compared with June 2015. The number of completed foreclosures nationwide decreased year over year from 40,000 in June 2015 to 38,000 in June 2016, representing a decrease of 67.5% from the peak of 117,835 in September 2010.
The foreclosure inventory represents the number of homes at some stage of the foreclosure process and completed foreclosures reflect the total number of homes lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 6.3 million completed foreclosures nationally, and since home ownership rates peaked in the second quarter of 2004, there have been approximately 8.4 million homes lost to foreclosure.
As of June 2016, the national foreclosure inventory included approximately 375,000, or 1.0%, of all homes with a mortgage compared with 507,000 homes, or 1.3%, in June 2015. The June 2016 foreclosure inventory rate is the lowest for any month since August 2007.
CoreLogic also reports that the number of mortgages in serious delinquency (defined as 90 days or more past due including loans in foreclosure or REO) declined by 21.3% from June 2015 to June 2016, with 1.1 million mortgages, or 2.8%, in this category. The June 2016 serious delinquency rate is the lowest in nearly nine years, since September 2007.
“Mortgage loan performance depends on the economic health of local markets, with varied differences even within a state,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Within Texas, the serious delinquency rate in the Dallas metropolitan area has fallen by 0.5% from a year earlier, as home prices and employment have continued to rise. The rate in the Midland area, on the other hand, has jumped 0.5%, reflecting the weakness in oil production and job loss over the past year.”
“The impact of the inexorable reduction over the past several years in both foreclosure trends and serious delinquencies is driving the long-awaited return to more historic norms for the U.S. housing market,” said Anand Nallathambi, president and CEO of CoreLogic. “We expect the combination of continued home price appreciation of more than 5% and rising employment levels in the year ahead will help cement the gains we have had and perhaps accelerate them.”
Additional June 2016 highlights:
- On a month-over-month basis, completed foreclosures increased by 5.1% to 38,000 in June 2016 from the 36,000 reported for May 2016.* As a basis of comparison, before the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month nationwide between 2000 and 2006.
- On a month-over-month basis, the foreclosure inventory was down 3.6% compared with May 2016.
- The five states with the highest number of completed foreclosures in the 12 months ending in June 2016 were Florida (60,000), Michigan (47,000), Texas (27,000), Ohio (23,000) and California (22,000). These five states account for almost 40% of all completed foreclosures nationally.
- Four states and the District of Columbia had the lowest number of completed foreclosures: The District of Columbia (179), North Dakota (321), West Virginia (487), Alaska (639) and Montana (675).
- Four states and the District of Columbia had the highest foreclosure inventory rate: New Jersey (3.4%), New York (3.1%), the District of Columbia (2%), Hawaii (2%) and Maine (1.9%).
- The five states with the lowest foreclosure inventory rate were Colorado (0.3%), Michigan (0.3%), Minnesota (0.3%), Nebraska (0.3%) and Utah (0.3%).