Despite what was termed a seasonal increase in March, foreclosure activity in the first quarter of 2016 was at its lowest level in nine years. RealtyTrac's U.S. Foreclosure Market Report covering both the first quarter and the month of March showed activity during the quarter had dropped below pre-recession levels in 36 percent or 78 of the 216 metro areas tracked by the company.
There were a total of 108,970 foreclosure filings including default notices, scheduled auctions, and bank repossessions or completed foreclosures in March, an 11 percent increase from February and the highest total for a month since last October. Filings were still 11 percent lower than a year earlier. Even with the single month increase filings in the first quarter were 4 percent below those in the last quarter of 2015 and down 8 percent from the first quarter of last year. There were a total of 289,116 filings in the quarter.
"Despite a seasonal bump higher in March, foreclosure activity in most markets continues to trend lower and back toward more healthy, stable levels," said Daren Blomquist, senior vice president at RealtyTrac. "More than one-third of the 216 local markets we analyzed were below their pre-recession foreclosure activity averages in the first quarter, and we would expect a growing number of markets to move below that milestone the rest of this year - while the number of markets with a lingering low-grade fever of foreclosure activity continues to shrink."
Among the metropolitan areas which have dropped below pre-recession foreclosure levels are Los Angeles, down 27 percent, Dallas (-65 percent), Houston (-64 percent) Miami (-19 percent) and Atlanta (-57 percent.)
Still more than two-thirds of major markets remain well above pre-recession levels including many of the largest such as Washington, DC (+134 percent), Philadelphia (+997 percent) New York (+80 percent), and Boston (+46 percent.) Activity was continued to increase increased year-over-year in 103 of the major metro areas including in Boston where activity rose 49percent, Philadelphia (+18 percent), Phoenix (+10 percent), Baltimore (+9 percent) and New York (+7 percent) and six areas reached new peaks during the quarter; Syracuse, Utica-Rome, and Binghamton in New York, Kingsport, Tennessee; College Station, Texas; and Tuscaloosa, Alabama. Areas that have similarly recovered or remain above earlier levels are highlighted on the map below.
Foreclosure filings affected one in 459 housing units nationwide. The states with the highest level of activity were Maryland (one in every 194 units), New Jersey (one in 216 units), Nevada (one in 236), Delaware (one in 240), and Florida (one in 274). Other states posting top 10 foreclosure rates in the first quarter of 2016 were Illinois, Ohio, South Carolina, Indiana, and Pennsylvania.
The monthly increase in March was driven by a jump in pre-foreclosure notices: foreclosure starts and scheduled foreclosure auctions. Foreclosure starts - the first public notice starting the foreclosure process - increased 21 percent from the previous month but were still down 11 percent from a year ago. Foreclosure starts increased on an annual basis during the month in 20 states and scheduled foreclosure auctions were up in 23 states.
"Over the last 10 years, U.S. foreclosure activity on average has increased 6 percent from February to March, and the 11 percent increase this year was not far off that typical seasonal bump," noted Blomquist. "February is of course a shorter month, and banks often ramp up foreclosure filings in March to take advantage of the spring selling season - which should prove particularly favorable to banks this year given low inventory levels of homes for sale and continued strong demand from buyers regaining confidence in the housing market.
For the second straight quarter foreclosure timelines fell slightly to an average of 625 days nationally. Six states, New Jersey, Hawaii, New York, Utah, Florida, and Connecticut still have average times to foreclose exceeding 1,000 days.