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Foreclosure Statistics 2010
Monday, July 26, 2010
The first 6 months of 2010 saw over 1.9 million foreclosure proceedingsinitiated. This staggering amount accounts for an average of 1 in 411 homesreceiving notice. Some areas were much higher, while others reached a staggering1 in 78 receiving notice.
When the foreclosure market is this high it is bad for new home builders andexisting home sales. Foreclosures present good opportunity for investorsbecause they drive the prices low on the homes. Builders and other home ownersare required to drop their prices to compete with the flood of bad mortgagehomes.
Freddie Mac reported that in the second quarter, the amount of bad loansactually decreased. However, the full two quarter total is higher than expectedand larger than the figures for last year.
Senior economists at several major mortgage lending firms have stated that thetrend is bound to worsen as the end of the year approaches. Foreclosures areexpected to increase through the remainder of the year and sales are notexpected to increase. New legislation attached to the recent financialregulations bill signed into law by the Obama administration has many newmortgage related regulations. Banks and lending institutions will become evenstricter with lending policies in an effort to comply with new regulations.This will decrease the amount of sales.
The last six months of the year are generally slow for sales anyways. Withschool starting and holidays approaching people are less likely to initiate amove.
Builders have found that the flood of foreclosure properties on the market isstifling their business. Many of the homes that have been foreclosed on arenearly new and people are able to purchase them far under market value. Thecompetition has closed many builders and created a large list of layoffs.
California, Arizona,Nevada, Floridaand Michigancontinue to have the highest foreclosure rates in the country. States that arenot battling high unemployment have lower foreclosure rates. Proof thatforeclosure and unemployment go hand in hand.