Foreclosed homes are popular among today’s home buyers. They’re typically in good condition and homes can sell at steep discount as compared to non-foreclosed homes. However, as the U.S. economy improves and home values rise, there are nearly one-third fewer homes going into foreclosure.
Want to buy a foreclosed home? Consider acting soon. The supply of foreclosed homes for sale has dropped to an 8-year low.
Foreclosures Down Sharply From October
According to foreclosure-tracking firm RealtyTrac, fewer than 114,000 homes received a foreclosure filing in November. The is a 15 percent decrease from the month prior, and represents the sharpest one-month drop in more than 3 years.
RealtyTrac defines a”foreclosure filing” as any of the following foreclosure-related events : A default notice on a home loan; a scheduled auction for a home; or, a bank repossession of a home.
1 in 1,155 U.S. households received some form of filing last month, a figure far below the rates of 2009 and 2010. Foreclosures still happen, but with much less frequency.
Analysts use the term “foreclosure start” to describe when a homeowner has been served with a Notice of Default, typically after 90 days of non-payment on a mortgage. The default notice is the first step in the foreclosure process, which ends with the delinquent homeowner being removed from the place of residence.
There are fewer homes even entering the foreclosure process.
Foreclosures are down, in part, because of the improving U.S. economy — more than 7 million people have returned to work since the start of the decade, and homeowners with paychecks are more likely to stay current on their loans.
However, aggressive homeowners assistance programs should not be overlooked. Loan modification programs such as the Home Affordable Modification Program (HAMP) and principal forgiveness programs have helped homeowners keep their homes, and avoid the foreclosure process.
There were fewer than 31,000 bank repossessions (REO) in November, a 48% drop from one year ago and the lowest level since July 2007 — 76 months ago.
It’s tough to find foreclosures for purchase because there are fewer foreclosures nationwide.
Florida, California Lead States In Foreclosure Start Rates
Foreclosed homes are popular among home buyers. Most properties are maintained and habitable and, plus, they sell for deep discounts as compared to comparable, non-distressed properties.
According to the National Association of REALTORS®, homes in foreclosure sold at an average 17 percent discount in October 2013, and comprised roughly 14% of all home purchases.
For buyers in 2014, finding foreclosed homes to purchase may be a challenge.
Consider sticking to these five states in which foreclosure starts are currently highest:
- Florida : 6,744 foreclosure starts
- California : 5,181 foreclosure starts
- New York : 3,458 foreclosure starts
- Texas : 3,409 foreclosure starts
- Illinois : 2,825 foreclosure starts
The states in which foreclosure starts were fewest included Montana (9), Washington, D.C. (4), and North Dakota (0).
Buy Foreclosures With A Low-Downpayment Mortgage
For today’s foreclosure buyers, it’s not just home prices and mortgage rates which are low — mortgage downpayment requirements are low, too. Via an FHA mortgage, home can be bought with just 3.5% down, and via the VA, military borrowers can access zero-down mortgage financing.
There’s also the Good Neighbor Next Door program through which buyers can get homes for 50% off.
Time to make a move? Let us find the right mortgage for you