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U.S. Foreclosure Rate Surges 47 Percent

April 19, 2007

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What a difference a year makes. Foreclosure notices rose 47 percent from March 2006 to last month, according to RealtyTrac, a real estate research firm. The company said banks initiated 149,000 foreclosure actions in March 2007, the most since the company began collecting data.

The March numbers were up seven percent from the month before. It makes for a national foreclosure rate of one foreclosure filing for every 775 U.S. households during the month.

"Foreclosure activity shifted into a higher gear in the first two months of 2007, and March's numbers continued that trend," said James J. Saccacio, chief executive officer of RealtyTrac.

But Saccacio said that while foreclosures are causing a major disruption in the subprime sector of the lending industry and saturating pockets of some local markets, "it's important to note that U.S. foreclosure activity overall is not far above historical norms."

"Last year we saw a surge in foreclosures in the first quarter followed by a leveling off through the second and third quarters," he said. "However, if that pattern does not repeat itself, and foreclosure activity continues to accelerate, we may see more widespread consequences."

Nevada, Colorado Top the List

Nevada's foreclosure activity increased 29 percent from the previous month, helping the state register the nation's highest state foreclosure rate for the third month in a row. The state reported 4,738 foreclosure filings during the month, more than triple the number reported in March 2006 and a foreclosure rate of one foreclosure filing for every 183 households — more than four times the national average.

Colorado's foreclosure rate of one new foreclosure for every 292 households was 2.7 times the national average and second highest among the states. The state reported 6,267 foreclosure filings during the month, an 18 percent increase from the previous month and a 16 percent increase from March 2006.

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California's foreclosure rate also leaped upward. The state reported 31,434 foreclosure filings in March, the most of any state and an increase of 36 percent from the previous month. The state's total was nearly triple the number reported a year ago and accounted for 21 percent of the nation's total.

The surge in foreclosure activity pushed California's foreclosure rate to one foreclosure filing for every 389 households -- third highest among all the states and nearly twice the national average.

Other states with foreclosure rates ranking among the nation's 10 highest in March were Georgia, Arizona, Michigan, Florida, Ohio, Indiana and Illinois.

The five states with the most foreclosure filings in March -- California, Florida, Texas, Michigan and Ohio -- together accounted for 50 percent of the nation's total. Foreclosure activity increased on a year-over-year basis in all five of these states, and all five documented foreclosure rates above the national average, but foreclosure activity was down from the previous month in Florida and Michigan.

Six out of the 10 cities with the nation's highest metro foreclosure rates were located in California. A 137 percent spike in foreclosure activity boosted the foreclosure rate in Stockton, Calif., to one foreclosure filing for every 128 households -- the highest metro foreclosure rate in the nation and more than six times the national average.

Other California cities with foreclosure rates in the top 10 included Vallejo-Fairfield at No. 3, Modesto at No. 5, Sacramento at No. 6, Riverside-San Bernardino at No. 7 and Bakersfield at No. 10.

Las Vegas documented the nation's second highest metro foreclosure rate, one foreclosure filing for every 139 households — more than five times the national average. The metro area reported 4,307 foreclosure filings during the month, a 33 percent increase from the previous month. Other metro areas with foreclosure rates among the nation's 10 highest included Greeley, Colo., Detroit and Denver.

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