Distressed properties have decreased to start off 2014, according to a new report from LoanLove.com. Following an anticipated marked decrease in distressed properties, the report found that U.S. foreclosure filings in February dropped to the lowest level experienced in over seven years.
Foreclosure filings in February dropped 10 percent lower than the previous month, and have followed a downward trend since peaking at 1.05 million in 2010.
The report commented that while lower foreclosures rates indicate a slowly recovering housing industry, home values will likely appreciate and help build equity faster in the long term but housing will still be less affordable for the near term.
"Distressed properties are still contributing to the national supply of available homes, but foreclosure filings are clearly falling," the report said. "Improvements in the economy have meant fewer homeowners losing their homes and more lenders agreeing to short sales."
February saw a reported 112,498 foreclosure filings, which include default notices, repossessions, and auctions. The month's data represented a 27 percent drop from the previous year, and the lowest point since December, 2006.
The report found that so-called "zombie" foreclosures (homes that have been vacated by homeowners), which topped out earlier this year at 152,000, remained relatively flat compared with the third quarter of 2013.
The company projects that foreclosure sales are "likely to play a diminishing role in the housing market in 2014, with continued year-over-year decreases on the horizon."
"However, for some prospective home owners and real estate investors, the foreclosure and short sale market will continue to offer some opportunities, as it did prior to the bursting of the housing market bubble," the report said.
Despite national foreclosure figures hitting historic lows, 10 states saw foreclosures increases last year: Maine, Maryland, Arkansas, Vermont, New Jersey, New York, Connecticut, Delaware, Washington, and Pennsylvania.