RealtyTrac’s Midyear 2016 U.S. Foreclosure Market Report shows a total of 533,813 U.S. properties with foreclosure filings—default notices, scheduled auctions or bank repossessions—in the first six months of 2016, down 20 percent from the previous six months and down 11 percent from the first six months of 2015.
The report by the national housing data provider also showed that, counter to the national trend, 19 states posted year-over-year increases in foreclosure activity in the first half of 2016. Those states included Massachusetts (up 46 percent), Connecticut (up 40 percent), Virginia (up 18 percent), Alabama (up 11 percent) and New York (up 10 percent).
Among the nation’s 20 most-populated metro areas, five posted year-over-year increases in foreclosure activity: Boston (up 38 percent); Philadelphia (up 7 percent); New York (up 4 percent); Washington, D.C. (up 3 percent) and Baltimore (up 1 percent).
“Although there are some local outliers, the downward foreclosure trend continued in the first half of 2016 in most markets nationwide,” said Daren Blomquist, senior vice president at RealtyTrac. “While U.S. foreclosure activity is still above its pre-recession levels, many of the states hit hardest by the housing crisis have now dropped below pre-recession foreclosure activity levels. With some exceptions, states with foreclosure activity continuing to run above prerecession levels tend to be those with protracted foreclosure timelines still working through legacy distress from the last housing bust.”
NATIONWIDE FORECLOSURE ACTIVITY
There were 280,989 U.S. properties with foreclosure filings in Q2 2016, down 3 percent from the previous quarter and down 18 percent from a year ago, to the lowest level since Q4 2006.
Nationwide foreclosure activity in Q2 2016 was still 21 percent above the prerecession average of 232,082 properties with foreclosure filings per quarter in 2005, 2006 and 2007. But Q2 2016 foreclosure activity was below prerecession averages in 15 states, including Arizona (13 percent below prerecession averages), California (25 percent below), Colorado (72 percent below), Georgia (33 percent below), Michigan (46 percent below), Nevada (18 percent below), Ohio (9 percent below) and Texas (46 percent below).
States where Q2 2016 foreclosure activity was still above prerecession averages included Florida (26 percent above prerecession levels), New Jersey (215 percent above), Illinois (36 percent above), New York (127 percent above), Indiana (2 percent above), South Carolina (376 percent above), Massachusetts (127 percent above) and Washington (29 percent above).
There were 94,469 U.S. properties with a foreclosure filing in June, down 6 percent from the previous month and down 19 percent from a year ago to the lowest level since July 2006—a nearly 10-year low.
STATES WITH TOP FORECLOSURE RATES
Nationwide, 0.40 percent of all housing units (one in 249) had a foreclosure filing in the first six months of 2016.
States with the highest foreclosure rates were New Jersey (0.98 percent of housing units with a foreclosure filing), Maryland (0.90 percent), Delaware (0.78 percent), Florida (0.70 percent) and Nevada (0.68 percent).
Other states with foreclosure rates among the 10 highest in the first six months of 2016 were Illinois (0.61 percent), Ohio (0.54 percent), South Carolina (0.54 percent), Connecticut (0.48 percent) and Indiana (0.47 percent).
TOP METRO FORECLOSURE RATES
Among metropolitan statistical areas with at least 200,000 people, those with the highest foreclosure rates in the first half of 2016 were Atlantic City, New Jersey (1.85 percent of housing units with a foreclosure filing); Trenton, New Jersey (1.31 percent); Baltimore (0.96 percent); Lakeland-Winter Haven, Florida (0.91 percent); and Rockford, Illinois (0.91 percent).
Other metro areas with foreclosure rates among the 10 highest in the first six months of 2016 were Philadelphia (0.86 percent); Tampa-St. Petersburg, Florida (0.85 percent); Jacksonville, Florida (0.80 percent); Columbia, South Carolina (0.78 percent); and Chicago (0.76 percent).
FORECLOSURE STARTS
A total of 253,408 U.S. properties started the foreclosure process in the first half of 2016, down 17 percent from a year ago, the lowest level for any half-year period since RealtyTrac began tracking foreclosure starts in 2006.
Counter to the national trend, 13 states and the District of Columbia posted a year-over-year increase in foreclosure starts. Those included Connecticut (up 91 percent), Massachusetts (up 35 percent), Arizona (up 12 percent), Ohio (up 10 percent) and Virginia (up 6 percent).
FORECLOSURE COMPLETIONS (REO)
Lenders foreclosed (REO) on 197,425 U.S. properties in the first half of 2016, down 6 percent from a year ago, but still 48 percent above the prerecession average of 133,391 per half-year.
Counter to the national trend, 26 states and the District of Columbia posted a year-over-year increase in REO activity in the first half of 2016. Those included Alabama (up 73 percent), New York (up 65 percent), New Jersey (up 56 percent), Massachusetts (up 43 percent) and Virginia (up 37 percent).
INVESTOR PURCHASES AT AUCTION
A total of 227,473 foreclosure auctions (which in some states is also the foreclosure start) were scheduled in the first half of 2016, down 23 percent from a year ago.
Based on separate sales deed data also collected by RealtyTrac, 27 percent of all properties sold at foreclosure auction were purchased by third-party investors, the highest share for the first six months of any year since 2000—the earliest national data available.
The investor share of purchases at foreclosure auction reached 20 percent or higher in only two previous years: 2005 (20 percent) and 2015 (22 percent). The investor share of purchases at foreclosure auction dropped to a 17-year low of 11 percent in 2008.
LONGEST FORECLOSURE TIMELINES
Foreclosures completed in the second quarter of 2016 took an average of 629 days from the first public notice of foreclosure to complete the foreclosure process, up from 625 days the previous quarter and unchanged from a year ago.
States with the longest foreclosure timelines were New Jersey (1,249 days), Hawaii (1,236 days), New York (1,058 days), Utah (1,025 days) and Florida (1,012 days).
States with the shortest foreclosure timelines were Virginia (195 days), Minnesota (219 days), Mississippi (237 days), Tennessee (238 days) and Wyoming (242 days).
REPORT METHODOLOGY
The RealtyTrac U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing entered into the RealtyTrac database during the month—broken out by type of filing. Some foreclosure filings entered into the database during the month may have been recorded in previous months. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default—Notice of Default (NOD) and Lis Pendens (LIS); Auction—Notice of Trustee’s Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). The report does not count a property again if it receives the same type of foreclosure filing multiple times within the estimated foreclosure timeframe for the state where the property is located.
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