More Real Estate Trouble: Foreclosures Hit 1.65 Million in First Half

The number of foreclosures in the US hit 1.65 million in the first half. That is an increase of 8% from the same period last year, and a 5% decrease from  the previous six months, according to RealtyTrac.

The report also shows that 1.28 percent of all U.S. housing units (one in 78) received at least one foreclosure filing in the first half of the year.There is a silver lining.  “June numbers improved modestly, ” according to the analysis. “Foreclosure filings were reported on 313,841 U.S. properties in June, a decrease of nearly 3 percent from the previous month and a decrease of nearly 7 percent from June 2009. June was the sixteenth straight month where the total number of properties with foreclosure filings exceeded 300,000.”

That hope many be short-lived.  Tax credits available for home purchases ended in April which means that demand for distressed inventory will likely fall.

Foreclosure filings were reported on 895,521 U.S. properties during the second quarter, a decrease of nearly 4 percent from the previous quarter and an increase of less than 1 percent from the second quarter of 2009. “The second quarter was a tale of two trends,” said James J. Saccacio, chief executive officer of RealtyTrac. “The pace of properties entering foreclosure slowed as lenders pre-empted or delayed foreclosure proceedings on delinquent properties with more aggressive short sale and loan modification initiatives. Meanwhile, the pace of properties completing the foreclosure process through bank repossession quickened as lenders cleared out a backlog of distressed inventory delayed by foreclosure prevention efforts in 2009.”

The news seems to go hand in hand with other data about the second quarter and early July. The economy probably slowed considerably in the April though June period. And, consumer sentiment is dropping, according to recent data from Gallup and Bloomberg. People who might have been home buyers have abandoned the market, once again pushing down demand that might give the housing market some relief.

Douglas A. McIntyre