Foreclosures still dragging down housing market

may-2015-foreclosure

by Dan Rafter

There are still too many housing foreclosures in the United States. That’s the takeaway from the latest foreclosure report from RealtyTrac.

The company found that in May foreclosure filings were reported on 126,868 U.S. properties. That’s up slightly — 1 percent — from April and up 16 percent from the same month one year earlier.

May actually saw a 19-month high in foreclosure filings.

RealtyTrac said that the increase in foreclosure activity was primarily the result of a rise in bank repossessions. The company said that the 44,892 repossessions in May were up 58 percent from one year ago.

Foreclosures are a problem because they drag down housing prices in an entire neighborhood. Say you want to list your home for $200,000. You might not attract many offers at that level if there are three similar foreclosure properties in your neighborhood that are selling for $50,000 less apiece.

“May foreclosure numbers are a classic good news-bad news scenario, with the number of homeowners starting the foreclosure process stabilizing at pre-housing crisis levels but the number of homeowners actually losing their homes to foreclosure still well above pre-crisis levels and on the rise,” said Daren Blomquist, vice president at RealtyTrac, in a statement. “Lenders and courts are pushing through stubborn foreclosure cases that have been languishing in foreclosure limbo for years as options to prevent foreclosure are exhausted or left untapped.”

A total of 51,414 U.S. properties started the foreclosure process for the first time in May. That’s down 1 percent from the previous month but up 4 percent from a year ago.

RealtyTrac reported that 13 of the country’s 20 largest metro areas saw increases in foreclosure activity this May when compared to the same month one year earlier. St. Louis’ foreclosure activity jumped 56 percent, while Detroit saw an increase of 27 percent.

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