U.S. Foreclosure Rate Continues Upward Trend with 14.4% Increase in Q3
September Shows One New Foreclosure Filing for Every 1,122 U.S. Households
Sept. 06,2006--
Bargain Network (bargain.com), a leading online provider of real estate foreclosure, pre-foreclosure and for-sale-by-owner properties and information, reported today based on estimates that foreclosure activity in the third quarter of 2006 (July-to-September) climbed approximately 14 percent compared to the second quarter of 2006 (April-to-June). This also marks a 39 percent increase in foreclosure activity compared to the same quarter last year. Foreclosure activity in September 2006 remained relatively strong with an estimated 103,000 properties entering some stage of the foreclosure process during the 30 day period. And while this represents a dip of about 10 percent in foreclosure activity compared with a near record previous month in August, it represents a 51 percent increase in foreclosure activity compared to September 2005. September figures, along with figures from the third quarter, show one new property entering some stage of the foreclosure process for every 1,122 U.S. households.
Top Five States Represent 66 Percent of Foreclosure Activity
Five states -- Florida, California, Michigan, Texas and Colorado – accounted for an estimated 66 percent of September’s foreclosure filing activity.
Florida represented the state with the nation’s highest foreclosure activity with approximately 28,000 properties entering some stage of the foreclosure process, accounting for 27 percent of the overall nationwide foreclosure activity. With 1 new foreclosure filing for every 254 households, the state’s foreclosure rate was over 4 times the national average.
California ranked second with approximately 17,000 foreclosures entering some stage of the foreclosure process, or 1 foreclosure for every 712 households in the state. The state’s foreclosure activity represents a 37 percent increase from the previous month, and a 44 percent increase in Q3 compared with Q2.
Texas recorded nearly 9,000 foreclosures entering some stage of the process, or 1 foreclosure for every 920 households in the state, and Colorado posted an estimated 7,000 foreclosure listings, or 1 foreclosure for every 266 households. While both states recorded high levels of overall foreclosure activity, Texas actually slowed down compared to last month, posting a 38 percent decrease in foreclosure activity, while Colorado accelerated slightly, posting a 13 percent increase in activity compared to last month.
“Florida and the western states are known for their predominance of negative amortization loans in which mortgage holders pay only interest, not equity on their properties,” stated Tom Adams, President and CEO of Santa Barbara-based Bargain Network. “We anticipate that foreclosure rates will stabilize, and that foreclosures will continue to be an attractive investment vehicle as a cooling economy and slower housing market force some people who purchased real estate using sub-prime mortgages to default on those loans in the months ahead.”
Despite Turnover at Top, Many States Continue to Post Significant Increases
Several states throughout the US continued to show an increase in month over month foreclosure activity, some of which posted an increase during each of the last three months. This increased foreclosure activity represents a growing opportunity for investors and first time home buyers looking to enter specific markets. Kentucky’s foreclosure activity increased by roughly 3 percent in September compared with August, bringing the number of foreclosure filings in the Bluegrass State to a monthly high of just over 900. This marks the third successive month in a row that the number of foreclosure filings has increased in Kentucky, bringing the saturation rank to 1 foreclosure in every 1,900 households, approximately.
Missouri’s activity also increased for the third time in as many months to a total of over 1,700 foreclosure filings in the month of September, a 29 percent increase over the previous month. As the 21st biggest state in the US and the 16th most populous state, Missouri posted an estimated 1 foreclosure filing for every 1,750 households.
The foreclosure rate in Nevada behaved much like the rates in Kentucky and Missouri, whereby Nevada posted its third straight monthly foreclosure activity increase, and a 42 percent increase over last month’s activity. Not all states, however, posted increased foreclosure activity numbers. Arizona and Illinois both returned to lower foreclosure activity rates that were more consistent with rates that were seen at the onset of Q3, whereby Arizona leveled off in September, and Illinois decreased around 7.5 percent compared with August, but increased 12 percent compared with the June/July period.
And More to Come. . .
Industry forecasters recently estimated that more than $200 billion worth of adjustable rate mortgages will “reset” at higher rates in 2006 and over $1 trillion will reset in 2007. This situation, compounded by the expected slowing of the economy and the housing market, which according the National Association of Realtors includes a growing inventory of unsold homes, may edge more homeowners into the foreclosure process.
“Rising interest rates and higher energy prices are making it especially difficult for homeowners who relied on home price appreciation to build equity and drew upon that equity to support their lifestyles,” noted Adams. “This is a group that we see as most at risk for future foreclosures.”
The Bargain Network Monthly U.S. Foreclosure Trend Report provides foreclosure activity information and changes based on the total number of homes entering some stage of foreclosure nationwide. Data is also available at the individual state level. Bargain Network’s report includes properties in all three phases of foreclosure: Pre-foreclosures — Notice of Default (NOD) and Lis Pendens (LIS); Foreclosures — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). For more information, visit bargain.com/homes.
About Bargain Network
Bargain Network (bargain.com) is one of America’s leading providers of fast and accurate information on the pricing, quality and availability of hard-to-find real estate bargains such as pre-foreclosures, foreclosures and for sale by owner properties. A trusted resource for real estate information for over 10 years, Bargain Network has leveraged leading-edge, proprietary search technology with best-of-breed customer management practices to enable home buyers and sellers to find, evaluate and purchase properties at below market costs. Bargain Network has over 700,000 hard-to-find properties with daily updates. Millions of consumers have used Bargain Network to help them find the right property at the right price.
Media Contact:
Barbara King
C2K Communications
(908) 347-9026
email: c2kpr@optonline.com
Please note:
The information provided in this news release is based on an analysis of proprietary data from a variety of independent, proprietary and public sources. Bargain Network assumes no liability for errors or omissions. The data provided is for information purposes only.