Foreclosure rates are on the rise in the United States as house prices continue to drop. This is great news for home buyers looking for a bargain. Sellers, however, would be advised to give it more time.
FHFA report shows distinct decline
The Federal Housing Finance Agency reports this week that its home-price index fell in the current quarter quicker than at any time since 2008. In the last quarter, prices went down 2.5 percent, which is a 5.5 percent drop from last year was. The report didn’t contain all homes. Only Fannie Mae or Freddie Machomes were integrated. It excludes cash only sales.
Difficulties caused by foreclosures
According to Edward DeMarco, FHFA director, “In many local real estate markets, particularly those hit hard by this cycle, foreclosures and other distressed properties are still a key factor in recorded and anticipated future sales and may be delaying price stability or recovery.” There has been a decrease in the price people are willing to pay for foreclosures. It has been going down considerably, RealtyTrac explained. The average sales price was $168,321 during the first quarter, which is a 1.89 percent drop from the previous quarter, and 1.46 percent from a year ago. The rest of the homes are worth less since foreclosures lower the value of homes in the neighborhood.
Foreclosure third parties
”While foreclosure sales continue to account for an unusually high percentage of all residential home sales, sales volume is well off the peak we saw in the first quarter of 2009, when nearly 350,000 foreclosure properties were sold to third parties,” said CEO of RealtyTrac, James Saccacio. There were 158,434 homes sold to third parties in the first quarter. That’s a 16 percent decline from the previous quarter and from a year ago it dropped 36 percent.
States have different foreclosure rates
Every state has a different number of homes being foreclosed on. In Ohio and Illinois it was 41 percent. Both California and Arizona had the same also. It was 45 percent for both. In Nevada, foreclosures were 53 percent of the industry.
Beware of foreclosure scams
This trend has brought out higher numbers of foreclosure rescue scams. Some companies promise to protect from foreclosure for an upfront fee. The homeowners end up with nothing. The Federal Trade Commission no longer allows upfront fees for negotiations on mortgage reduction plans. This change was made in February.
Articles cited
Wall Street Journal
blogs.wsj.com/marketbeat/2011/05/25/home-prices-fall-at-fastest-pace-since-late-2008/?mod=google_news_blog
DS News
dsnews.com/articles/home-prices-post-biggest-drop-in-two-years-as-foreclosures-depress-market-2011-05-26
DS News
dsnews.com/articles/home-prices-post-biggest-drop-in-two-years-as-foreclosures-depress-market-2011-05-26
Daily Finance
dailyfinance.com/2011/05/27/foreclosure-prices-fall-again-how-your-state-stacks-up/
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