The national foreclosure inventory rate, according to Black Knight Financial Services, fell below 1 percent in October for the first time since July 2007. That rate, which measures the number of mortgaged homes in the process of foreclosure, dropped by 0.95 percent from September and was down 30.24 percent compared to its level in October 2015.
Black Knight, in its "first look" at October mortgage performance data, said there are now 504,000 homes in the inventory, a decline of 5,000 in a month and 217,000 year-over-year.
That wasn't the only good news in the report. Foreclosure starts declined by 8.3 percent from September and were 22.81 percent lower than in October 2015. At 56,500, the number of October starts was the lowest since January 2005.
Delinquencies were up by what Black Knight called a "modest" and seasonal 1.84 percent, but were down nearly 9 percent year-over-year. There were 2.02 million loans that were 30 or more days past due but not yet in foreclosure in October, up 37,000 from August but 213,000 fewer than a year earlier. This is a delinquency rate of 4.35 percent. Of those loans, there were 677,000 that were considered seriously delinquent, that is 90 or more days past due but not in foreclosure. This was a monthly increase of 9,000 but 143,000 fewer than in September of last year.
At the end of the reporting period distressed loans, including delinquent loans and those in foreclosure, totaled 2.71 million. This is down by 430,000 on an annual basis.
The highest levels of distressed loans continue to be in Mississippi (11.23 percent) and Louisiana (10.18 percent.) New Jersey, at 8.15 percent, Alabama (7.93 percent) and New York (7.85 percent) round out the top five.
Prepayments, generally considered an indicator of refinance activity, declined by just over 3 percent from September to a rate of 1.49 percent. This is still 37 percent above last year's level.
The company will provide a more in-depth review of this data in its monthly Mortgage Monitor report which will be published by Dec 5, 2016.