US Market Foreclosures Fall to Lowest Level Since 2009

The housing market, long a disaster area in the US economy, seems to be rebounding. Home foreclosures in 2014 have fallen to their lowest levels since the housing bust and mortgage applications are booming.

Mortgage applications jumped 49% in a single week because interest rates for home loans fell to their lowest level in two years. The Mortgage Bankers’ Association said the week of 9 January also saw a 30% jump in mortgage applications compared with last year. The largest source of the jump was current homeowners looking to refinance their homes at lower interest rates.

There is a reason for the urgency in refinancing mortgages: the Federal Reserve has indicated that in the middle of 2015 it will raise the base interest rate – the federal funds rate – which will have a knock-on effect in raising mortgage rates as well.

The data show encouraging trends in the housing recovery, which the Federal Reserve chair, Janet Yellen, recently referred to as “disappointing”.

The number of homes repossessed by banks fell 29% last year to the lowest level since 2006, a year before the subprime mortgage crisis erupted, according to data released on Thursday by foreclosure listing firm RealtyTrac.

Not all states saw completed foreclosures decline last year. Nine states registered an increase from 2013, including Maryland, New York, Oregon and New Jersey.

One reason for the drop nationwide: fewer homes entered the foreclosure process last year.

Foreclosure starts tumbled 14% versus a year earlier to the lowest level since 2006, the firm said.

via The Guardian

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