Foreclosure activity has been falling steadily for the past few years as the housing market recovers, but the latest reading shows it has hit a new milestone.
According to RealtyTrac, a foreclosure sales and analytics company, 107,194 U.S. properties had a foreclosure filing in June—the lowest level since July 2006, before the housing price bubble burst.
“Over the next six to nine months, nationwide, foreclosure numbers should start to flat line at consistently historically normal levels,” said RealtyTrac’s Daren Blomquist in a release.
Improvement, however, does not mean the level of distressed housing is back to normal; not by a long shot. There continues to be a wide discrepancy between states that require a judge in the foreclosure process and those that do not.
Nine states saw foreclosure activity rise in the first half of 2014 compared with a year ago, according to RealtyTrac. They include judicial states such as New Jersey (up 54 percent), Maryland (up 18 percent), Massachusetts (up 4 percent) and Connecticut (up 4 percent). Florida, also a judicial foreclosure state, had the highest rate, with one in 74 housing units receiving some kind of foreclosure filing.
“There continue to be concerning trends in some states and local markets that clearly indicate those markets are not completely out of the woods when it comes to the lingering foreclosure problem left over from the housing bust,” Blomquist said.
It has all created an interesting scenario. The result of the foreclosure crisis was a complete overhaul of the rules governing lending. That improved mortgage quality dramatically and all but negated delinquencies on the latest loans.
“There’s virtually nothing new entering the pipeline—loans issued over the past few years are performing at the highest rates in history,” Sharga said.