Despite an increase in the total inventory of foreclosures, fewer new foreclosures were filed in August. But data indicate more borrowers will soon be in distress.
The number of properties entering a stage of foreclosure in August was 115,292, up 24 percent from July and 53 percent higher than in the comparable month a year ago, according to RealtyTrac's announcement of its latest U.S. Foreclosure Market Report.
Meanwhile, the national foreclosure rate of one new foreclosure filing for every 1,003 homes was the second highest monthly foreclosure rate reported for the year.
"With home price appreciation continuing to decelerate and billions of dollars in adjustable rate mortgages projected to reset in the next few months, this month's increase could be the beginning of an upward shift in the foreclosures market," said RealtyTrac Chief Executive James J. Saccacio in the statement.
For the sixth month in a row, Colorado led the nation in foreclosure activity with its rate spiking nearly 60 percent from the previous month to one new foreclosure filing for every 301 households. The state's 6,079 properties entering some stage of foreclosure was more than twice the number reported in August 2005, the online foreclosure marketplace provider reported.
Nevada again reportedly had the second-highest foreclosure rate, with one for every 430 homes, and its number of properties entering a foreclosure stage was more than three times the number a year ago.
Florida took over Texas' spot as the state with the third-highest foreclosure rate, with one new foreclosure filing for every 442 households. The Sunshine State's number of properties entering the foreclosure process jumped 50 percent from July to 16,533 -- the highest level of the year and the largest increase of all states.
The five states with the most new foreclosure filings, Florida, Texas, California, Ohio and Illinois, accounted for half of the nation's foreclosure activity last month, RealtyTrac said.
Within the nation's 252 largest metropolitan areas, Greely, Colo., posted the highest foreclosure rate, with one new foreclosure filing for every 136 households -- more than seven times the national average, according to the announcement.
Baton Rouge, La., followed with one new foreclosure for every 166 homes, RealtyTrac said, noting that the sharp rise in this area's and state's foreclosure activity was in part due to the foreclosure moratorium imposed by the Department of Housing and Urban Development for hurricane victims ending last month.
Fort Lauderdale, Fla., reportedly documented the nation’s third highest metro foreclosure rate, with one filing for every 174 households.
RealtyTrac says its publishes "the largest and most comprehensive national database of pre-foreclosure and foreclosure properties," with nearly 650,000 properties and over 2,500 counties nationwide.
Foreclosure.com, which says its tracks foreclosures county-by-county, state-by-state, in real time, reported more optimistic numbers for August but agreed foreclosure activity will be pressured upward.
The company said there were 26,255 new foreclosures in August, down 6.7 percent from July but up 7.3 percent from a year ago.
"We continue to see fluctuations when analyzing data month-to-month," said Brad Geisen, president and CEO of Foreclosure.com. "But as we near the end of the third quarter, most housing and economic indicators point to a sustained period of increased new foreclosure activity across the country."
The active inventory of foreclosures available for sale dropped to the lowest level of the year in August at 85,467, Foreclosure.com.
The foreclosure listing service pointed to the West as an emerging foreclosure hot spot because from July to August Arizona, California and New Mexico experienced significant increases in new foreclosures -- respectively 155 percent, 32 percent and 10 percent -- as well as in active foreclosure inventory.
"For California homeowners, the worst could be yet to come," Geisen noted. "Home prices there are coming down from their historically high rates, buyers are drying up, and it has become difficult lately to sell a home to avoid foreclosure in the Golden State. Because of this situation, we anticipate significant increases in California's foreclosure rates if the current housing situation continues as more and more preforeclosures convert to foreclosures."