With a stubbornly high unemployment rate...and lack of job creation, conditions are ripe to see further increases in REO foreclosures.
Santa Barbara, CA (PRWEB) September 11, 2010
RealtyStore (http://www.realtystore.com), the fastest growing, leading provider of foreclosure and financially distressed real estate listings in the country, completed its review of REO foreclosure activity through June 2010, finding REO inventory has increased materially and is poised to add additional inventory through the end of the year.
REO Foreclosure Inventory Up 6.4% vs 2009
In June alone, counts of new Real Estate Owned (REO) properties increased 28.1% over May’s counts. June’s inventory also represented a 6.4% increase year-over-year.
“This is a significant increase in foreclosure activity, and it correlates with data we’ve seen thus far pointing to a further weakening of the US housing markets.” said Tim Chin, CEO of RealtyStore. “Adding further acceleration in foreclosure proceedings initiated by Fannie Mae and Freddie Mac (who upped their REO activity by 17.6% and 15.5% respectively in late July), we expect REO inventory to remain elevated into Q4 2010.”
In addition, further fueling the foreclosure escalation are estimates that suggest approximately 25% of homeowners with a mortgage owe more than their home is worth. Additional market price declines, which may result from further softening in home demand in the near term, could result in more foreclosures from this segment, and contribute to a rise in prime loan failures.
Poor Employment Prospects Hamper Purchases of REO Foreclosures
With REO inventory growing there is tremendous downward pressure on prices resulting in a buyer’s market in most areas of the country. Mortgage interest rates remain at historic lows, driving housing affordability to attractive new levels in many markets, according to the latest statistics released by the National Association of Home Builders. However, buyers remain very reluctant to enter the market. A continued poor and uncertain employment market continues to weigh down demand.
John Stewart, RealtyStore’s Chief Economist, added, “According to our statistical model, jobs and incomes are still the primary determinants of REO behavior. Mortgage interest rates remain at historic lows, and this helps conditions for certain distressed homeowners and those able to renegotiate loan terms. However, with a stubbornly high national unemployment rate (9.5% as of July) and a lack of job creation, the conditions are ripe to see further increases in REO foreclosures.”
About RealtyStore.com: Founded in 2005, RealtyStore.com is the fastest growing, most trusted provider of foreclosure listings and information in the nation with over 1 million pre-foreclosure, foreclosure auction, bank-owned, and tax sale property listings. Collected from hundreds of public and private sources, RealtyStore's proprietary database includes extensive property characteristics, default and tax information, comparable home values, and neighborhood demographics information. For more information, visit http://www.RealtyStore.com .
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