5 States Where Foreclosure Starts Are Surging
Foreclosure filings were reported on 148,054 U.S. properties in May, according to RealtyTrac’s U.S. Foreclosure Market Report. This is an increase of 2 percent on the month, but a decline of 28 percent on the year. One in every 855 housing units had a foreclosure filing in May.
“Foreclosure activity continued to bounce back in some markets where it may have appeared the foreclosure problem had been knocked out by an aggressive combination of foreclosure prevention efforts over the past two years,” commented Daren Blomquist, vice president at RealtyTrac. “Places like Nevada, where foreclosure starts increased to a 20-month high, and Maryland, where overall foreclosure activity increased to a 33-month high. Still, the emerging housing recovery has strengthened most local markets enough to quickly shake off a few more blows from these nagging foreclosures.”
Here’s a look at the five states where Foreclosure starts increased the most in May.
5) New Jersey
Foreclosure starts in the Garden State increased 82 percent on the year in May, according to RealtyTrac. In March, the firm calculated that the Northern New Jersey metropolitan area had a 97-month inventory of foreclosed property, the biggest backlog in the nation. The overall percentage of homes in New Jersey facing foreclosure is up to 7.2 percent.
What can appropriately be called a glut of foreclosed homes hitting the market in New Jersey has negatively affected the growth of home prices. Data from the National Association of Realtors shows that median home prices in the state declined 0.5 percent sequentially in the first quarter, and climbed just 5.3 percent on the year. This compares against an increase of 1.9 percent sequentially and 6.7 percent on the year for the nation.
Foreclosure starts in Arkansas increased 84 percent on the year, according to RealtyTrac. Arkansas has an average foreclosure rate of about 7 percent, considerably higher than the national average of 1 percent.
Bank repossessions increased 156 percent on the year in Arkansas in May, the biggest increase of any state for the month. Banks seem more willing to go ahead with finalizing the foreclosure process as overall sales increase, indicating that there may be demand for a repossessed home.
Foreclosure starts increased 108 percent on the year in May in Hawaii, according to RealtyTrac. The state has an average foreclosure rate of 8 percent, which some observers have found dubious given the state’s low unemployment rate of just 4.9 percent and relatively high median household income of $66,420. Approximately 13.5 percent of homes in the state are vacant. The average time to complete a foreclosure in Hawaii is 824 days, according to Real Estate Economy Watch.
Foreclosure starts in Connecticut increased 122 percent on the year in May, according to RealtyTrac. One in every 839 properties received a foreclosure notice in the state in May, a total of 1,768 properties. The state has an average foreclosure rate of 12 percent.
CoreLogic, a real-estate research firm, reported that the number of underwater mortgages in Connecticut increased from 14.7 to 15.8 percent of the market in the first quarter. This is still below the national average of 19.8 percent.
Foreclosure starts in Maryland increased 229 percent on the year in May, according to RealtyTrac. The state has an average foreclosure rate of 18 percent. Overall foreclosure activity is up 11 percent on the month, with one in every 587 housing units holding a foreclosure filing.
Don’t Miss: Risk-On Mode Puts Markets Back on Top.