Many parts of the country posted an increase in foreclosure activity in October from September, but the figures still mark an improvement from the same month last year.
Data from RealtyTrac's U.S. Foreclosure Market Report reveals 186,455 homes received default notices, scheduled auctions or fell into bank repossession in October. This is up 3 percent from foreclosure filings in September, though still 19 percent down from October last year.
More than 89,000 properties began the foreclosure process via default notices of scheduled auctions in October, up 2 percent from September, but 19 percent less than the same month last year. This marks the third consecutive month of an annual decrease in starts, with only 15 states including New Jersey, Washington, New York and Pennsylvania posting annual increases higher than 40 percent.
Underwater homeowners affected by Sandy catch break from lenders
Some states that saw the largest rise in foreclosure activity in October on an annual basis include New Jersey, New York and Connecticut, which all posted increases of 40 percent or more. The data firm notes that states that were severely affected by Hurricane Sandy saw sizable jumps from 2011 to 2012. However, foreclosure activity was down 8 percent when compared to the month before.
Data from RealtyTrac shows 34 counties in the three states hit hardest by the storm accounted for 6,380 foreclosure filings in October. While this could contribute to an overall lower amount of foreclosures, these states could post an increase in November once paperwork is processed after potentially being delayed at the end of the month.
"Unfortunately the three states dealing with the biggest rebound in deferred foreclosure activity - New Jersey, New York and Connecticut - also had to deal with the devastation to homes inflicted by super storm Sandy," said Daren Blomquist, vice president of RealtyTrac. "The foreclosure moratoriums being put into effect as a result of the storm will likely extend the already-lengthy time to foreclosure in these states, further prolonging a fundamentally sound housing recovery."
With less homes becoming delinquent, the inventory of foreclosures and short sales listed on the market has shrunk throughout the second half of the year. This also means prices are no longer hindered by the discounts characteristic of these homes.