The number of home foreclosures in the US slid three percent between May and June, said foreclosure listings website RealtyTrac. But the country’s swelling numbers of troubled homeowners remains high.
“While the foreclosure problem is being managed on the surface, a massive number of distressed properties and underwater loans continues to sit just below [it], threatening the fragile stability of the housing market,” said James J. Saccacio, CEO of RealtyTrac.
In fact, it appears that the foreclosure situation on residential properties is being mitigated. The number of foreclosure fillings made in the first half of this year was 1.65 million, or five percent below the number of foreclosure made in the second half of last year.
However, according to mortgage data aggregator Lender Processing Services, home loan delinquency rates climbed 2.3 percentage points between April and May. Mortgage delinquency rates were 9.2 percent two months ago, and that number could increase further given the high unemployment rates in the country.
With so many troubled loans, many banks remain unwilling to lend, and this dearth of activity in the property sector could depress both housing prices and new-home constructions.