National foreclosure activity in the third quarter of 2013 hit its lowest quarterly level since 2007, but some states are bucking the downward trend, according to a new study from a leading housing data firm.
Foreclosure filings were reported on 131,232 U.S. properties in September, according to RealtyTrac’s U.S. Foreclosure Market Report, released Thursday. That’s a 2% increase from August, but still down 27% from September 2012. Last month was the 27th consecutive month of annual decreases in foreclosure activity.
Even with September’s slight month-over-month increase, Q3 still saw the lowest quarterly foreclosure activity since the second quarter of 2007. The 376,931 U.S. properties with foreclosure filings in the third quarter represented a 7% decrease from Q2 and a 29% decrease from the third quarter of 2012.
Foreclosure starts were also down dramatically in the third quarter, according to RealtyTrac. A total of 174,366 properties started the foreclosure process in Q3, a 13% decrease from Q2 and a 39% decrease from a year ago.
While there are fewer foreclosures lately, the process is taking longer – which could be a problem for the housing recovery, according to RealtyTrac Vice President Daren Blomquist.
“The September and third quarter foreclosure numbers show a housing market that is haltingly returning to health,” Blomquist said. “In a healthy housing market foreclosures are rare but streamlined while still protecting the rights of the homeowner. While foreclosures are clearly becoming fewer and farther between in most markets, the increasing time it takes to foreclose is holding back a more robust and sustainable recovery.”
And while foreclosure starts decreased in 38 states – led by Colorado, which saw a 71% drop – they rose in 11. The biggest increase was in Maryland, where foreclosure starts shot through the roof in the third quarter, spiking 259%.
“The sharp jumps in foreclosure activity in some local markets may come as a surprise to some,” Blomquist said. “These spikes in activity demonstrate that while millions of distressed homeowners have been pulled back from the precipice by foreclosure prevention programs over the past several years, once those programs expire or are exhausted, a percentage of these troubled homeowners are still susceptible to falling into foreclosure. In addition even slight economic downturns at the local or regional level can push these homeowners hanging on by a thread over the edge.”