June Foreclosure Rates are In!

In June, US home foreclosures fell after they rose to a 30 month high in May. However, as a large number of mortgages reset at higher interest rates, default rates will escalate, according to Realty Trac, a real estate data firm. In June, foreclosure filings fells by 7% to 164,644, after they rose 19% in May. Foreclosure filings are still 87% above where they were in June 2006, currently at 1 foreclosure filing for every 704 households. According to Rick Sharga, the vice president of marketing for Realty Trac, the outlook for the rest of 2007 is not very optimistic. He states that there are between $600 million and $1 billion worth of ARMs that have interest rates set to rise in the late 2007. He predicts that many of these homeowners are going to default on their loans, meaning there will be a second spike in foreclosures in the fall. 33 states reported less foreclosures in June, but that was to be expected after the sharp rise in May, says Realty Trac.  However, we don’t know if it is a one month fall, or if it is going to continue to fall. States who have had the highest number of foreclosure filings will probably continue to see these high numbers, unless an unforeseen crisis hits another state. Nevada had 1 filing for foreclosure for every 174 households, and was the state with the highest number of foreclosures since January. While Nevada’s foreclosure rate dropped by 10% from May to June, the state still had more foreclosures than any other, and had 3 time more foreclosures in June 2007 than they did a year ago. In second and third place were California and Colorado, respectively. Florida, Arizona, Ohio, Michigan, Georgia, Connecticut and Indiana, were also all on the top 10 list. In several of the states, what realtors are seeing is the depreciation in housing prices, such as Florida, California, and Arizona. Other states are suffering mainly from homeowners who obtained subprime loans, and are unable to make their payments.