New data released by CoreLogic reveals a slight increase in the number of completed foreclosures in January compared to the previous month.
According to CoreLogic's January 2016 National Foreclosure Report, foreclosure completions on the first month of the year recorded 38,000 units. That is 5,000 more units compared to December's 32,000 or 16.4 percent, Market Realist reported.
On one hand, foreclosure completion activities fell year-on-year at 16 percent. There is also a 22 percent decline in foreclosure inventory to 456,000 homes from last year's 583,000 units.
"In January, the national foreclosure rate was 1.2 percent, down to one-third the peak from exactly five years earlier in January 2011, a remarkable improvement," said Dr. Frank Nothaft, chief economist for CoreLogic, per World Property Journal. "The months' supply of foreclosure fell to 12 months, which is modestly above the nine-month rate seen 10 years earlier and indicates the market's ability to clear the stock of foreclosures is close to normal."
Market Realist explained that foreclosures cause several ripple effects in the property sector. An increase in foreclosure activities is associated with housing supply forecast and house prices. Distressed properties tend to sell lower than normal at around 15 to 20 percent discount. Consequently, neighboring properties also experience lower appraisals and home values.
"The improvement in distressed properties continues across the country in every state which is contributing to the lack of stock of available homes and resulting price escalation in many markets," president and CEO of CoreLogic, Anand Nallathambi, said via World Property Journal. "So far the trend toward lower delinquency and foreclosures has been immune from shocks from such things as the collapse in oil prices attesting to the durability of the housing recovery."
Over the past 12 months to January 2016, five states accounted for almost half of the national foreclosure completions. Florida recorded 74,000 units of completed foreclosure, followed by Michigan with 49,000 and Texas (29,000). California had 25,000 and Ohio 24,000.
