Home Foreclosures Approach Peak Range
Although the U.S. housing market witnessed its smallest annual increase in foreclosure activity in four years last month, distressed-property tallies are expected to remain in an elevated range for some time. Foreclosure filings were reported on more than 308,000 American homes in February, RealtyTrac said Thursday. That's a 2 percent decline from January but a 6 percent increase from a year earlier. All told, February represents the 12th consecutive month with more than 300,000 foreclosure filings.
The slight monthly decrease is linked to two key factors, says
Still, a number of forces are working to push foreclosures higher from here. The sluggish labor market isn't expected to turn around anytime soon. Economics firm IHS Global Insight projects the national unemployment rate--which now stands at an uncomfortably high 9.7 percent--to decrease only slightly, to 9.6 percent, by the end of the year. The rickety employment environment increases the likelihood that homeowners will lose the income stream they need to pay the mortgage. Meanwhile, many homeowners who have enrolled in Uncle Sam's housing rescue will eventually fall behind on their mortgage payments again, says
For his part, Sharga agrees that foreclosures will flatten out at their current, elevated levels. He expects foreclosures to begin posting annual decreases in late 2011. "We are banking on economic recovery, which means job creation and people will be able to afford their homes," he says.
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Home Foreclosures Approach Peak Range | Luke Mullins
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