January saw foreclosure activity on 315,716 properties in the United States, a drop of nearly 10% compare to December. These filings include notices of defaults, auctions, and bank repossessions. The activity is still 15% above that of last January.
Keep in mind that some servicers let foreclosures lag over the holidays. According to James J. Saccacio, chief executive officer of RealtyTrac, which compiled the figures, “If history repeats itself we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works.”
Nevada topped the states in foreclosure rate for the 37th straight month with one in every 95 homes getting a foreclosure notice, more than four times the national average. Las Vegas had the highest foreclosure rate of any metro area, one in 82. Arizona foreclosures actually grew by 4% compared to December propelling it to second on the list. Both California and Florida posted double digit month to month declines.
In California, the state with the greatest number of foreclosures, the worst might be over. For the fourth quarter as a whole foreclosures eased by 24%, down 38% from the peak in the first quarter of 2009. Lenders reduced mortgage payments for 172,288 Californians last year through President Obama’s Making Home Affordable program. Only 7.8 of these loan mods have been made permanent. Still, foreclosed homes as a percentage of homes sold continue to decline in the state, down to 40.7% compared to 54.4% during the last quarter of 2008.
Home values are also starting to recover. The fourth quarter of 2009 showed a rise in home values in more than 40% of American metropolitan areas, according to the National Association of Realtors. That’s more than double the improvement between the previous two quarters. Overall the national median price for a home was $172,900,off just 4.1% from the year before, the smallest decline in a couple of years.
The homebuyer tax credit spurred an increase in home sales for the fourth quarter which showed seasonally adjusted annual rate of 6 million sales, a rise of 27% from the last quarter the year before.
The economy as a whole is getting stronger. In figures released today, retail sales rose in January by .5% which doesn’t seem much, but that’s compared to the holiday shopping season. In fact, in contrast to to last January the growth was 4.7% showing that consumers are finally starting to buy more than essentials.
With foreclosures down, home prices stabilizing and both home and retail sales up, this is good news for a distressed borrower, trying to decide if it’s worth hanging on to a home that remains underwater. It’s also a good time to buy a home, especially if you are a first time homebuyer and can take advantage of the homebuyer’s tax credit and still low mortgage interest rates.
