Foreclosure inventory drops nearly 24%

by Ryan Smith12 Feb 2016
Foreclosure inventory dropped nearly 24% year over year in December, according to new data from CoreLogic.

According to the analytics firm’s December 2015 National Foreclosure Report, released Tuesday, foreclosure inventory declined by 23.8% in December, and completed foreclosures were down by 22.6% from December 2014. There were 32,000 completed foreclosures in December – down 72.8% from a peak of 117,722 in September of 2010.

Foreclosure inventory includes homes at some stage of the foreclosure process. Completed foreclosures represent homes lost to foreclosure. Since the beginning of the financial crisis in 2008, about 6.1 million U.S. homes have been lost to foreclosure, according to CoreLogic.

But the foreclosure rate continues to slow. According to the CoreLogic survey, the national foreclosure inventory in December was about 433,000 homes – about 1.1% of all U.S. homes. That’s down from 568,000 – about 1.5% of all U.S. homes – in December of 2014. The December 2015 foreclosure inventory was the lowest for any month since November of 2007, CoreLogic reported.

“Reflecting on the full-year foreclosure results for 2015, we can see that completed foreclosures are down more than 20 percent for the year, which is the lowest level since 2006, before the crisis,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Maryland, which can be described as a suburb of the solid D.C. market, led the way with a 59-percent decline in foreclosures in 2015.”

The number of mortgages in serious delinquency – defined as being 90 days or more past due – is also dropping. The number of seriously delinquent mortgages dropped by 23.3% between December 2014 and December 2015. The December 2015 rate of serious delinquencies – just 3.2% of all mortgages – is at its lowest in eight years.

But there is something of a downside to the declining number of distressed properties, according to CoreLogic.

“The supply of distressed inventory continues to shrink rapidly. While this is positive for the housing market overall, it also drives a decline in the inventory of affordable for-sale homes,” said Anand Nallathambi, president and CEO of CoreLogic. “The lack of housing stock, particularly affordable inventory, is a growing issue and will limit a full housing recovery in the short to medium term.”
 

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