Foreclosure completions declined significantly both month-over-month and year-over-year in October, but are still way above pre-recession levels, according to CoreLogic‘s October 2014 National Foreclosure Report released on Thursday.
Foreclosure completions, which are an indicator of the number of homes lost to foreclosure, totaled 41,000 for October 2014, according to CoreLogic. The number was down 26.4 percent from October 2013, when 55,000 foreclosures were completed. Month-over-month, foreclosure completions fell 34.1 percent, down from the 62,000 completions that were reported for September.
The number of foreclosure completions has dropped 65 percent from its peak achieved in September 2010, according to CoreLogic. Before the housing market crashed in 2007, foreclosure completions averaged about 21,000 per month nationwide between 2000 and 2006.
Foreclosure inventory, which is the number of homes in some state of foreclosure, totaled 605,000 in October 2014, which was a 30.9 percent decline from October 2013, when 875,000 homes were in some state of foreclosure in the U.S. October 2014 was the 36th consecutive month in which there was a year-over-year decline in foreclosure inventory, according to CoreLogic. Foreclosure inventory declined by 2.1 percent month-over-month from September to October.
“While there has been a large improvement in the reduction of foreclosure inventory, completed foreclosures remain high and serve as one of the obstacles to new single-family construction,” said Sam Khater, deputy chief economist for CoreLogic. “Until the flow of completed foreclosures declines to normal levels, new-home construction will not pick up because builders have little incentive to compete with foreclosure stock.”
CoreLogic reported that 1.6 percent of all homes with a mortgage in the U.S. were in some state of foreclosure in October 2014, down from 2.2. percent in October 2013. October 2014’s foreclosure rate of 1.6 percent was the lowest it has been since May 2008.
“The foreclosure inventory is less than 2 percent and seriously delinquent loans are trending lower right now,” said Anand Nallathambi, president and CEO of CoreLogic. “At current rates, we can expect the foreclosure inventory to slip below 500,000 units during 2015.”