Foreclosure filings fell 34 percent in the U.S. last month as first-time defaults dropped to the lowest level in almost eight years and rising home prices made it easier for distressed owners to sell, RealtyTrac said.
Default, auction and repossession filings totaled 128,560 in August, with one in 1,019 U.S. households receiving a notice, the Irvine, California-based data seller said today in a report. It was the 35th consecutive month in which total notices declined on an annual basis, with foreclosure starts plunging 44 percent, RealtyTrac said.
"The foreclosure floodwaters have receded in most parts of the country, but lenders and communities continue to clean up the damage left behind," RealtyTrac Vice President Daren Blomquist said in the report.
Increasing buyer demand and climbing property values are helping some troubled borrowers refinance or sell rather than lose their homes to foreclosure. The S&P/Case-Shiller index of property values in 20 cities rose 12.1 percent in June from a year earlier. Last month, foreclosure starts totaled 55,775, the lowest since December 2005, and fell on a year-over-year basis in 38 states, RealtyTrac said.
Declines occurred in states with and without court oversight of the process, with judicial states Illinois and Massachusetts both falling 66 percent, Florida dropping 65 percent and Indiana declining 43 percent, according to RealtyTrac. Among non-judicial states, Colorado fell 80 percent, Arizona and Washington both decreased 65 percent and California dropped 57 percent.
Bank seizures rose 6 percent last month from July, the third increase in four months, "a trend that will likely continue into next year," Blomquist said.
The 26 states with increases in repossessions from a month earlier included New York, where seizures climbed 123 percent to the most in close to three years, and New Jersey, where they surged 63 percent to a 31-month high. Repossessions rose 48 percent in Florida, 46 percent in Ohio and 41 percent in Indiana.
Nevada had the highest foreclosure rate in August, with one in 359 households receiving a notice, followed by Florida, Ohio, Maryland and Delaware, RealtyTrac said.