Fewer Minnesota Homes Entered Foreclosure In August

The number of foreclosures each month has been rather high for several years. However, August saw the fewest number of home foreclosures in Minnesota in a while and the lowest rate in the U.S. in almost eight years. This is a trend that is going to reduce the number of homes in foreclosure every month until the market sees rates that it considers to be normal or below normal.

Nationwide, over 55,000 homes entered the foreclosure process in August, which is an 8 percent decline from July and a 44 percent decline over August of 2012.

This national slowdown, which is a reflection of the slowdown in most states, is a reflection of the improving housing market, fewer troubled loans, and steady job growth.

While the risk of foreclosure stays rather high in a number of states, including Ohio, Florida, and Nevada, the pace of homes on the foreclosure track has declined in concert with the rebound of the housing market.

At the current rate, it is expected that the number of foreclosures each month will fall to around 52,000 per month around the beginning of the year. This is a pace that is considered normal. In other words, the number of foreclosures each month is almost back to normal.

There were 17 states that saw increases in August, while 38 saw declines.

Part of the decrease in foreclosures is also attributed to the rising home values. When home values rise, homeowners are given the equity that they need to refinance. Many homes had negative equity during the housing market collapse and this gave homeowners no leverage.

At the end of the second quarter, there were around 7.1 million homes with negative equity. This is 14.5 percent of the housing market. This is down from 19.7 percent of homes having negative equity.

Just for the first half of the year, 3.5 million homeowners saw their homes move back into positive equity. Now fewer homes are entering the foreclosure process. Nonetheless, lenders are now stepping up home repossession activities now that there are fewer homes entering foreclosure.

In August, the number of completed foreclosures increased 8 percent over July. This is the third monthly increase out of the last four months. A lot of this increase is due to states where the courts are the ones who oversee the foreclosure process. Two years ago, the courts were backed up, but they have done well working through their backlogs.

The number of homes taken by the banks in August climbed in 23 states. However, the percentage was down on a nationwide basis. As of August 1, there were around 1.3 million homes somewhere in the foreclosure process or they were owned by the banks. This is still a 5 percent decrease over 2012.

When foreclosures are completed for the year, the number will be approximately 390,000, which is a 26 percent decrease over 2012. Foreclosures actually saw their peak in 200 at just over 1 million.

 



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