Against the March 2010 high, foreclosures have plummeted 40 percent lower to over 222,000 units in June 2011 beginning fall last year, data from RealtyTrac showed.
The figures indicate a level of ease reached by mortgaged residential properties since the crisis in 2006, though the result does not amount to the total elimination of the negative impacts of the crisis on the economy and on the housing market in a short period of time.
RealtyTrac, an online marketplace of foreclosure properties, with more than 2 million default, auction and bank-owned listings from over 2,200 U.S. counties, earlier released its U.S. Foreclosure Market Report for July 2011, showing foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 212,764 U.S. properties in July, a 4 percent decrease from June and a 35 percent decrease from July 2010.
The report also showed one in every 611 U.S. housing units with a foreclosure filing during the month of July.
On the other hand, the most recent results coincide with the findings of Mortgage Bankers Association (MBA), indicating that total mortgages that started on the foreclosure process in the first quarter of 2011 represented 1.03 percent of all residential mortgages, nearly 0.45 percentage points below the June 2009 highs.
Current levels of foreclosures represent 4.5 percent of the residential portfolio. Along with possible new defaults in the following quarters, this suggests that the negative impact of this situation will continue to hound households and economic activities.
From being among the drivers of the three previous recoveries, residential investment has posed a negative impact upon the GDP growth amid sluggish economic pace.
A shadow housing inventory is also threatening the prices of residential homes and the number of new home starts as foreclosures remain high resulting from rising mortgage delinquency levels. Subsequently, its effects will be indirectly passed on to household consumption through real estate property and residential investment.