National property foreclosures were up in the third quarter compared to the previous quarter and year-ago findings due to a softening real estate market and higher interest rates, a foreclosure tracking service reported today.
In the third quarter, 318,355 properties entered some stage of foreclosure, up 17 percent from the previous quarter and up 43 percent from the same period last year, according to RealtyTrac. The nation had a foreclosure rate of one foreclosure filing for every 363 households during the quarter, slightly higher than last quarter’s rate of one foreclosure filing for every 425 households, but lower than the first-quarter rate of one foreclosure filing for every 358 households.
“Higher interest rates and a general softening of the real estate market are the two key factors contributing to the 43 percent increase in foreclosure filings from the third quarter of 2005,” said James J. Saccacio, CEO of RealtyTrac. “What our third-quarter research appears to be showing is that the first wave of adjustable-rate mortgages is having a negative impact on the number of homes going into foreclosure. With the volume of these loans — more than $1 trillion of them due to adjust over the next 15 months — this is a trend that definitely bears watching.”
Colorado posted the highest foreclosure rate in the nation for the second consecutive quarter, reporting one new foreclosure filing for every 127 households — 2.9 times the national average. After declining almost 13 percent between the first and second quarter of the year, foreclosure activity in the state was back up 24 percent from the second to the third quarter, with 14,374 properties entering some stage of foreclosure — the eighth-highest foreclosure total in the nation.
Nevada moved up from having the sixth-highest rate in the second quarter to the second-highest rate in the third quarter, reporting one new foreclosure for every 156 households — 2.3 times the national average, according to RealtyTrac. The state reported 5,561 properties in some stage of foreclosure during the quarter.
Florida, which had the ninth-highest foreclosure rate in the country for the second quarter, took over the number three spot from Texas during the third quarter, reporting one new foreclosure for every 182 households — almost twice the national average. With 40,136 properties in some stage of foreclosures during the quarter, the state reported the highest number of foreclosure filings during the quarter, barely beating out Texas, which held the number one spot for the previous two quarters.
Other states with foreclosure rates ranking them in the nation’s top 10 for the third quarter included Georgia, Michigan, Texas, Indiana, Utah, Ohio and Illinois, RealtyTrac reported.
A 55 percent spike in activity catapulted Florida into leading the nation in total foreclosure filings during the third quarter. Texas, which led the nation in foreclosure activity for the first two quarters of the year, moved into second place, reporting 39,363 properties in some stage of foreclosure. With a 35 percent spike in activity, California rounded out the nation’s top three, reporting 37,317 properties in some stage of foreclosure for the three-month period.
While both Florida and California experienced significant increases in activity for the quarter, RealtyTrac said, foreclosure activity in Texas remained basically unchanged, down less than 1 percent from the 39,690 properties reported for the second quarter, but still 18 percent above the 33,289 foreclosures reported for third quarter 2005. Compared to the same quarter last year, foreclosure activity in Florida is 26 percent above the 31,829 properties reported, and activity in California has increased 171 percent since the same quarter last year.
The state with the fourth-highest foreclosure total for the quarter was Michigan, reporting 20,777 properties entering some stage of foreclosure, a 37 percent increase from the second quarter and 109 percent above third-quarter-2005 numbers. Ohio posted the fifth-highest total, reporting 19,748 new foreclosure filings for the third quarter, a 23 percent quarter-to-quarter increase and 32 percent above the foreclosure numbers reported for the same quarter last year.
“While the overall number of foreclosures represents a return to more or less normal levels, there are pockets of the country that are being hit more severely,” Saccacio said. “States with underlying economic issues, such as high unemployment or depreciating home prices, will continue to outpace the rest of the country in the total number and rate of foreclosures.”
RealtyTrac publishes a national database of pre-foreclosure and foreclosure properties that includes nearly 650,000 properties from more than 2,500 counties across the country.