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More than 1.2 Million Foreclosures Reported in 2006

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

"U.S. foreclosures were consistently higher on a year-over-year basis in 2006, although there were some fluctuations up and down within the year," said James J. Saccacio, chief executive officer of RealtyTrac. “After a steep increase in the first quarter, foreclosure activity slowed in the second quarter and then began to climb again in the third quarter. 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 in 2006 represented more than 1 percent of all U.S. households. While that is up substantially from 2005, it is still within the scope of normal historical averages, according to Saccacio.

"There’s no doubt that foreclosures could have a significant impact on the housing market if they continue to increase. And in some local markets they are contributing to slowing home price appreciation and eroding demand from homebuyers," he said. " However, most local housing markets have thus far been able to absorb foreclosures without taking a serious hit. It could even be argued that a modest rise in foreclosures attracts more bargain buyers and investors to enter the market, thereby increasing demand and helping to counterbalance a so-called buyers market."

Colorado, Georgia, Nevada post highest foreclosure rates
Colorado documented the nation’s highest state foreclosure rate for the year, one foreclosure filing for every 33 households — or 3 percent of the state’s households. The state reported a total of 54,747 foreclosure filings during the year, an 85 percent increase from 2005 and the eighth highest total among all the states.

Georgia and Nevada both reported one foreclosure filing for every 41 households in 2006, but Georgia edged out Nevada with a slightly higher percentage of households in foreclosure — 2.5 percent compared to 2.4 percent in Nevada. Georgia reported a total of 75,975 foreclosure filings during the year, the sixth most of any state and a 67 percent year-over-year increase. Nevada foreclosures surged in fourth quarter, pushing the state’s total for the year to 21,045 — nearly three times the number reported in 2005.

Other states with foreclosure rates among the nation’s 10 highest included Texas, Michigan, Indiana, Florida, Ohio, Utah and Tennessee.

Texas, California, Florida report biggest foreclosure totals
Texas reported 156,876 foreclosure filings for the year, the most of any state and nearly 13 percent of the national total. The state consistently reported big foreclosure numbers throughout 2006, documenting the highest monthly total eight times, and foreclosures for the year were up more than 14 percent from 2005. Texas’ foreclosure total represented nearly 2 percent of the state’s households — or one foreclosure filing for every 51 households — giving the state the nation’s fourth highest state foreclosure rate.

Rising foreclosure activity in the fourth quarter pushed California’s 2006 foreclosure total to second highest among the states. The state reported 142,429 foreclosure filings during the year, more than twice the number reported in 2005 and accounting for more than 11 percent of the national total. California’s 2006 foreclosure rate of one foreclosure filing for every 86 households — or 1.2 percent of households — ranked 14th among the states.

Florida foreclosure activity remained relatively flat in 2006, up just 2 percent from 2005, but the state’s foreclosure total still placed third highest among all the states. Florida reported 124,721 foreclosure filings during the year, a foreclosure rate of one foreclosure filing for every 59 households — or 1.7 percent of households. The state’s foreclosure rate dropped to seventh highest in 2006 after claiming the top spot in 2005.

Other states with 2006 foreclosure totals among the nation’s 10 highest included Ohio, Michigan, Georgia, Illinois, Colorado, New York and Indiana.

The RealtyTrac Monthly U.S. Foreclosure Market Report provides the total number of homes entering some stage of foreclosure nationwide and by state in each quarter of 2006. RealtyTrac’s report includes properties in all three phases of foreclosure: Defaults — Notice of Default (NOD) and Lis Pendens (LIS); Auctions — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank).

*Actual year-over-year increase may not be as high due to expanded data   coverage in this state.

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