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IRVINE, CA—With foreclosure starts falling below pre-housing-crisis levels, are we at the best possible place in the housing and economic cycle? According to RealtyTrac's Mid-Year 2015 US Foreclosure Market Report, US foreclosure filings were at a 10-year low in the first half of the year, down 13% from the previous six months and down 3% from the same time period in 2014. The report also reveals that the total number of US properties that started the foreclosure process in the first half of the year is down 4% from a year ago and 18% below foreclosure starts in the first half of 2006 before the housing price bubble burst in August 2006. First-half 2015 foreclosure starts were at their lowest level in any year since RealtyTrac began tracking in 2006—a 10-year low.

What does this say about the housing market and the economy's overall health? “Actually foreclosure starts are inconsistent with historic levels in that they are below those levels, not above them,” Daren Blomquist, VP for RealtyTrac, tells GlobeSt.com. “This could be a sign that the market is not completely healthy in that it is too risk-averse and not allowing wide enough access to credit. The dangers with too-tight credit are a smaller pool of buyers resulting in stagnating sales and prices along with growing wealth inequality. But at the end of the day, the market is in much better shape for the long term when it is erring toward being too risk-averse as opposed to too risk-tolerant.”

There were 19 states where foreclosure starts in the first half of 2015 were at or below their pre-crisis levels of 2006, including California, Florida, Arizona, Georgia and Illinois. In Colorado, foreclosure starts in the first half of 2015 were less than half the number of foreclosure starts in the first half of 2006. According to Greg Smith, owner/founder at RE/MAX Alliance, covering the Denver market, “The reduction of foreclosures is adding to the limited inventory in the market as a whole and increased appreciation. Today, the decline in foreclosures, combined with limited new construction, nominal resale inventory and delayed entry of Millennials into the buying cycle is contributing to a very robust real estate market for the foreseeable future.”

As GlobeSt.com reported in June, foreclosure filings in May 2015 were up 1% from the previous month and up 16% from a year ago to a 19-month high, driven primarily by a jump in bank repossessions.

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