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IRVINE, CA—US residential foreclosure activity rose 3% in April to an 18-month high, according to a new report from RealtyTrac. Foreclosure filings were reported on 125,875 properties last month, up 9% from a year ago and representing one in every 1,049 housing units.
RealtyTrac says the increase was driven primarily by a jump in bank repossessions, which, at 45,168, were up 25% from the previous month and up 50% from a year ago to a 27-month high. REOs increased on a year-over-year basis for the second consecutive month. However, the spike in April REOs is still 56% below the peak of 102,134 REOs in September 2013.
Daren Blomquist, VP of RealtyTrac, says, “The REO increase in April was foreshadowed by a 23-month high in scheduled foreclosure auctions in October 2014. Many of those scheduled auctions are now taking pace, and properties are going back to the foreclosing lender. Meanwhile, we continue to see foreclosure starts decrease, and foreclosure starts nationwide are now running consistently below pre-crisis levels, indicating that the overall increase in foreclosure activity in April is a continuation of the clean-up phase of the last housing crisis, not the start of a new crisis.”
Blomquist adds that while distressed sales typically have a stifling effect on the housing market, “in this particular market an influx of distressed inventory could actually help stimulate sales during the spring and summer buying season as new listings become available, often in the middle to lower ranges of the market. Banks are liquidating these distressed properties in a seller's market with a low supply of inventory for sale, which should help them sell quickly and at a price that is relatively close to full market value.”
When asked if he expects REOs to continue rising and, if so, for how long, Blomquist tells GlobeSt.com, “Based on the pattern we saw late last year with scheduled foreclosure auctions—a leading indicator of REOs—we expect this to be a fairly temporary surge in foreclosure activity that may last another month or two at most.”
As GlobeSt.com reported in February, a 15-month high in bank repossessions drove a 5% increase in US residential foreclosure activity, and 21 states posted year-over-year increases in scheduled foreclosure auctions during January, according to a report from RealtyTrac. REOs hit a 24-month high in California and a 55-month high in New York that month, the firm reports.
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