Foreclosures in October 2016 were down by a quarter compared to the previous October and the foreclosure inventory shrank by nearly one third.  CoreLogic said today that there were 30,000 completed foreclosures during the month compared to 40,000 one year earlier, a 24.9 percent reduction. 

CoreLogic has revised its report on September foreclosures from the previously reported 34,000 to 41,000.  Thus, the October number represents a 27.5 percent month-over-month decrease.

At the peak of mortgage distress, foreclosures were completed on 118,287 homes in a single month (September 2010).  The most recent count represents a decrease of 74.7 percent from that peak. Between 2000 and 2006, before the decline in the housing market, completed foreclosures averaged 22,000 per month and there have been approximately 6.5 million homes lost to foreclosure since the financial crisis began in September 2008.

The foreclosure inventory, the number of homes in the process of foreclosure, dropped to 328,000 in October, 0.8 percent of all homes with a mortgage.  The inventory declined by 31.5 percent year-over-year from 479,000, or a rate of 1.2 percent. The inventory is 3.6 percent smaller than it was in September.

CoreLogic also reports that the number of mortgages in serious delinquency (defined as 90 days or more past due including loans in foreclosure or REO) declined by 24.8 percent from October 2015 to October 2016, with 1 million mortgages, or 2.5 percent, in serious delinquency, the lowest level since August 2007. Forty-seven states and the District of Columbia had lower serious delinquency rates than they did in October 2015.  

"Loan performance varies by the health of the local economy and housing market. Alaska, North Dakota and Wyoming, three states with energy-related job loss, experienced a rise in serious delinquency rates while all other states had a decline," said Dr. Frank Nothaft, chief economist for CoreLogic. "Although there were large declines in foreclosure rates in New York and New Jersey, both states experienced the highest serious delinquency rates in the nation, reflecting lagging home values in most neighborhoods and an unemployment rate above the national average."

"Housing and labor markets improved over the past year, setting the stage for further declines in foreclosure rates across much of the nation," said Anand Nallathambi, president and CEO of CoreLogic. "Home values posted an annual gain of 5.8 percent through September in the CoreLogic Home Price Index, and payroll employment rose 2.4 million for the year through October."

The five states with the highest number of completed foreclosures in the 12 months ending in October 2016 were Florida (51,000), Michigan (29,000), Texas (26,000), Ohio (23,000) and Georgia (20,000). These five states accounted for 36 percent of completed foreclosures nationally.

Four states and the District of Columbia had the highest foreclosure inventory rate in October 2016: New Jersey (2.8 percent), New York (2.7 percent), Maine (1.7 percent), Hawaii (1.7 percent) and the District of Columbia (1.6 percent).