The latest numbers are in, and the news is good: foreclosure rates are at a low not seen since before the housing market bubble burst six years ago. The numbers are still not back to where experts would like them to be, but signs point to the slow regrowth of the housing market since home values plummeted and foreclosures spiked in 2007. This could be good news for potential homebuyers and for sellers, as well.
Explaining the Numbers
According to a leading foreclosure attorney, the delinquency rate has been on a steady downward trend, with the current rate standing at just under 7%. This means that 7% of mortgages in the U.S. are currently delinquent – that is, behind on payment or in collections. The number is still rather high, says the foreclosure attorney, but is already a 4% improvement from just one year ago, which is a very promising trend.
In addition to the decline in foreclosures, short sales are down a whopping 60% from a year ago. The short sale decline is an even bigger indicator of recovery, as it shows that fewer and fewer homeowners are struggling with underwater mortgages as the housing market works to recover the lost equity from the bubble bursting in 2007.
All told, the foreclosure attorney says he is not alone in his confidence that the market is on its way to returning to levels equaling or exceeding those in 2006 and before; and he is looking forward to still lower nationwide foreclosure rates heading into the future.