U.S. Foreclosures Top 1.2 Million in 2006

RealtyTrac Staff
U.S. Foreclosure Filings Up 42 Percent From 2005

More than 1.2 million foreclosure filings were reported nationwide during 2006, up 42 percent from 2005 and a foreclosure rate of one foreclosure filing for every 92 U.S. households, according to RealtyTrac's year-end U.S. Foreclosure Market Report.

“While foreclosures are not at historically high levels, a 42 percent year-over-year increase is certainly noteworthy,” said James J. Saccacio, chief executive officer of RealtyTrac. “The increase in the number of properties in foreclosure was driven partly by the general slowing of overall housing sales, and partly by the impact of monthly mortgage payments increasing dramatically for homeowners who held some of the riskier types of adjustable rate and sub-prime mortgages. As more and more of these loans re-set, we saw a surge to finish the year, with the fourth quarter producing more foreclosure filings than any of the three previous quarters.”

The number of total foreclosure filings rose from about 885,000 in 2005 to 1,259,118 in 2006. While that is a substantial increase, it is still within the scope of normal historical averages, according to Saccacio.

“It’s true that foreclosures could have a negative impact on the housing market if they continue to increase at this rate. And in some of the more problematic local markets they already may be contributing to slowing home price appreciation and a glut of homes for sale,” he said. “However, most local markets have been able to re-absorb foreclosure homes without seeing any major damage to the local economy.”