More than six million homes have been lost to foreclosure since the US real estate bubble burst in 2008, but new data suggests banks are taking back fewer and fewer mortgaged homes from borrowers now as the American housing market shows more signs of recovery.
Some 433,000 dwellings across the US were in the foreclosure process in December, a 23.8 percent plunge from the same time a year ago and the lowest monthly level seen since November 2007, according to analytics firm CoreLogic.
Completed foreclosures in December totalled 32,000, down from the 41,000 seen throughout that month in 2014, representing a 22.6 percent year-over-year drop and a 5.6 percent fall from November.
In all, there there were 476,416 foreclosures in 2015, a 21 percent decrease from the previous year’s total of 603,028.
Nearly half of the foreclosures in 2015 occurred in five states, led by Florida, where 79,000 homes were lost. Michigan followed at 50,000 foreclosures, ahead of Texas at 30,000, and Ohio and Georgia, which each registered 24,000 foreclosures.
During the same period, only 81 homes were repossessed in District of Columbia, while the state with the lowest number of foreclosures was North Dakota, where there were 220. The state with the second lowest foreclosure level was Wyoming, with 541.
Capital Economics notes data is skewed by whether a market is in a judicial or non-judicial foreclosure state. In judicial states, lenders need a court-issued foreclosure order to reclaim a property. In non-judicial states they do not, which leads to shorter foreclosure timelines.
Anand Nallathambi, CoreLogic’s CEO, explains how the fall in foreclosures is double-edged.
“The supply of distressed inventory continues to shrink rapidly,” he says. “While this is positive for the housing market overall, it also drives a decline in the inventory of affordable for-sale homes.”