Foreclosure starts reached their highest level in a year in January, but foreclosure completions are falling faster than the seriously delinquent loan rate – resulting in an across the board increase in foreclosure pipeline ratios, according to Black Knight's' January 2015 Mortgage Monitor released today. Repeat foreclosure starts accounted for 51 percent of all foreclosure starts in January following an 11 percent month-over-month increase.
Meanwhile, foreclosure sales have been declining at a faster rate than the seriously delinquent loan inventory in both judicial and non-judicial foreclosure states, resulting in an increase in foreclosure pipeline ratios – the backlog in months of foreclosure and 90-day delinquent inventory based on current foreclosure sale rates. In judicial states, the pipeline ratio is at 58 months, up from 47 months in 2013; in non-judicial states, the pipeline ratio is near an all-time high at 53 months.
While February saw solid job gains of 295 thousand and a decline in unemployment rate down to 5.5 percent, the average hourly wage increased by only $.03 up to $24. 78 cents during the month and have risen by just 2 percent since February 2014, according to the Bureau of Labor Statistics. A lack of substantial wage growth has prevented housing from fully recovering, according to many analysts. Fannie Mae Chief Economist Doug Duncan said he believes eventually the robust hiring will translate to stronger income growth, after which "a stronger housing recovery will follow."