Completed foreclosures, foreclosure inventory, and serious delinquencies all experienced double-digit declines again in May, falling even further toward pre-recession levels, according to CoreLogic's May 2015 National Foreclosure Report released Tuesday.
On a year-over-year basis, foreclosure inventory—residential homes in some state of foreclosure—declined by 27 percent nationwide, down to about 491,000 homes, according to CoreLogic. This number represents about 1.3 percent of all residential homes with a mortgage nationwide. In May 2014, about 676,000 homes were in foreclosure, comprising 1.7 percent of all mortgages nationwide.
Completed foreclosures, which are an indication of homes actually lost to foreclosure, totaled 41,000 in May—a decline of 19.2 percent from the previous May, when 51,000 completed foreclosures were reported. May's total of 41,000 was a decline of 64.9 percent from the peak total of monthly completed foreclosures reached in September 2010. May 2015's total was still close to double the pre-crisis monthly average of 21,000 from 2000 to 2006, according to CoreLogic. About 5.7 million homes have been lost to foreclosure since September 2008, the start of the financial crisis, and about 7.8 million have been lost to foreclosure since homeownership rates peaked in 2004.
"With three million jobs created during the past year, the improving labor market has helped more borrowers stay current on their mortgage loan," said Frank Nothaft, chief economist for CoreLogic. "Because fewer loans are becoming seriously delinquent, the foreclosure inventory has come down to its lowest level in more than seven years, with only 1.3 percent of loans in foreclosure proceedings."
The number of seriously delinquent mortgages nationwide, which CoreLogic defines as those 90 days or more past due or in foreclosure or REO, dropped by 22.7 percent year-over-year in May down to about 1.3 million mortgages. This number represents about 3.5 percent of all residential mortgages nationwide, the lowest seriously delinquent rate since January 2008, according to CoreLogic.
"While the nation's seriously delinquent rate—3.5 percent—is at its lowest level since January 2008, it remains very high in several big markets," said Anand Nallathambi, president and CEO of CoreLogic. "The greater New York City region and central Florida continue to have some of the highest serious delinquency rates, almost doubling the national level. Default rates remain elevated in the Chicago and Baltimore metro areas as well."
Florida topped all states in completed foreclosures over the 12-month period ending May 31, 2015, with 104,000, nearly one-fifth of the national total of 528,382 for that period. At the same time, Florida experienced the largest year-over-year decline among states in foreclosure inventory with 47 percent, followed by Connecticut (36.5 percent). In all, 10 states experienced year-over-year declines of greater than 30 percent in their foreclosure inventory.
After Florida, the states with the highest sum of completed foreclosure were Michigan (46,000), Texas (33,000), California (28,000), and Ohio (27,000). These four states and Florida combined for about one-half of completed foreclosures nationwide during the 12-month period ending in May 2015. South Dakota had the lowest total of completed foreclosures during the 12 months with 19, followed by District of Columbia (105), North Dakota (326), Wyoming (498), and West Virginia (500).
The state with the highest serious delinquency rate in May was New Jersey (4.9 percent), followed by New York (3.7 percent), Florida (2.9 percent), Hawaii (2.5 percent), and the District of Columbia (2.4 percent). The state with the lowest foreclosure inventory as a share of residential mortgages was Alaska at 0.3 percent, followed by Colorado, Minnesota, Nebraska, and North Dakota at 0.4 percent each.