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Home Repos Up Sharply in MayJune 14, 2013
Banks are revving up their efforts to take back homes. In May, according to RealtyTrac, completed foreclosures were up 11 percent from the previous month (38,946 in May vs. 34,997 in April). In addition, it was the first time in five months the total had risen.
Foreclosure starts also are on the rise, going up four percent from April – but were still down a full third from May 2012 (source).
Why the sudden rise in repossessions? Much of it has to do with the economic recovery, which has resulted in a more robust housing market. The trickle-down effect results in higher housing prices and higher demand for homes in general.
According to the S&P/Case-Shiller index of values in 20 cities, prices of homes in the US went up more than 10 percent in the period from the beginning of January through March. This is the biggest gain since April 2006.
This has given the banks more confidence to go ahead and foreclose upon more homes than they have done in recent months. It will also help prospective home buyers, as it will increase the otherwise dwindling inventory.
If the current trend continues, the year will close with approximately 500,000 foreclosed homes. While this number is alarmingly large, it’s still down significantly from 2012, when the total was just over 670,000.
Florida led the nation in May with almost three times the average amount of foreclosures. In fact, according to RealtyTrac, one in every 302 of the state’s homes is in one stage or another of repossession (Nevada was second with one in 305). In contrast, the national average is one in every 885.