There is a wealth of positive news on the US housing market at the moment, so much so that it is hard to ignore. But in another way it is hard not to ignore it when you are constantly hearing about metrics returning to 2008 levels, what was so great about 2008? However, according to the latest data from Dataquick, a 67% drop in US foreclosure filings saw the figure hit its lowest level since Q4 2005 in the first quarter of this year, now that is hard to ignore.
According to the report 18,567 homes entered the foreclosure process in Q1, a 51.4 percent drop from the previous quarter.
"The unusually sharp drop in the number of mortgage default notices filed by lenders stems mainly from rising home values, a strengthening economy and government efforts to reduce foreclosures," the firm reported.
A package of new foreclosure laws - the Homeowner Bill of Rights - may also have impacted filings. The laws went into effect January 1 and default notices "fell off a cliff," before edging up in February, the firm reports.
"In recent years we've seen temporary lulls in foreclosure activity after new laws kick in and lenders adjust," said DataQuick president John Walsh in a statement. "It's certainly possible foreclosure starts will pick up at some point this year if lenders need to play a lot of catch-up."
According to Walsh rising home prices continue to have a positive impact on foreclosure figures. The latest data from the California Association of Realtors shows California home prices up 28.2 percent year over year in March.
"As values rise, fewer people owe more than their homes are worth, and more people can refinance into a more favourable loan," Mr. Walsh said. "It also means more who fall on hard times can sell their homes for enough to pay off the loan."
- Thursday 25 April 2013