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The New Economy

Outlook for home foreclosures brightens a bit

Home foreclosures in April decreased 2 percent from a year ago, the first 12-month decline in at least five years.

By / May 13, 2010

A line snaked around the Miami Beach Convention Center for people seeking help with underwater mortgages April 15. Home foreclosures dropped in April compared with a year ago. That's the first 12-month decrease in at least five years, according to a new report.

Tim Chapman/Miami Herald/AP/File

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The outlook for US home foreclosures brightened somewhat in April.

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After setting a record in March, home foreclosures dropped 9 percent in April, according to a report released Thrusday by RealtyTrac, an online marketplace for foreclosure properties. April also marked the first time that the number of monthly foreclosures dropped over a 12 month-period since the company began reporting foreclosures in 2005.

The 333,800 properties receiving foreclosure filings last month represented a 2 percent decrease from a year earlier,

"We're probably going to see the numbers stabilize somewhat," says Rick Sharga, senior vice president with RealtyTrac, based in Irvine, Calif. Banks appear to be managing their workload, processing current foreclosures before taking on a new load, he adds.

That doesn't mean the crisis is over for beleaguered homeowners who can no longer afford their mortgages. With 5 million to 5.5 million home loans seriously delinquent – far more than the foreclosures already completed – RealtyTrac expects total monthly foreclosures to peak sometime next year.

Still, the April numbers suggest that the totals are plateauing. One in every 387 US homes received a foreclosure filing in April, according to RealtyTrac.
Housing-crisis states like Florida and California continue to have the worst problems. Nevada had America's highest foreclosure rate for the 40th month in a row in April.

But increasingly these housing-crisis states are being challenged by high-unemployment states like Michigan, Illinois, and Georgia, although it will be some time before the unemployment centers overtake the housing-crisis states.

"As jobs vanish, you tend to see foreclosures appear, unfortunately," Sharga says,

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