The number of U.S. homes in some stage of foreclosure fell 35 percent during the past year, according to new data from foreclosure data company CoreLogic.
There were 752,000 homes in the foreclosure inventory in February 2014, down from 1.2 million one year earlier. As of February, the foreclosure inventory accounted for 1.9 percent of all mortgaged homes, a major decrease from 2.9 percent in February 2014. Foreclosures were also down on a monthly basis, falling 3.3 percent from January.
The number of homes with mortgages past due by 90 days or more – considered seriously delinquent – made up 4.9 percent of all homes with a mortgage. These together with all properties in foreclosure or real estate owned (REO) make up what CoreLogic calls “shadow inventory.” This helps estimate home many more foreclosures are still in the pipeline.
“The stock of seriously delinquent homes and the foreclosure rate are back to levels last seen in the final quarter of 2008,” said Anand Nallathambi, president and CEO of CoreLogic in a statement. “The shadow inventory has also declined year over year for the past 3 years as the housing market continues to heal, including double-digit declines for the past 16 consecutive months.”
As the number of foreclosures and the size of the shadow inventory continues to shrink, the housing market is able to move closer to normal. Since the financial crisis hit in September 2008, there have been 4.9 million completed foreclosures in the U.S. That flood of distressed properties depressed home prices and created plenty of negative equity for homeowners. Since the mortgage meltdown, loan credit quality has been much higher and the likelihood of future foreclosures has dramatically fallen, preparing the way for a true housing recovery.