Foreclosed properties now account for roughly a fifth of all homes listed for sale nationally.
The supply of foreclosed homes that banks need to sell is rising again, signaling further downward pressure on home prices in some parts of the U.S.Mortgage analysts at Barclays Capital in New York estimated that banks and mortgage investors held a total of 645,800 foreclosed homes in January, up 4.6% from 617,286 a month earlier.According to Barclays, the supply peaked at around 845,000 in November 2008 and then declined through 2009.Even though the number of people behind on mortgage payments kept rising last year, the flow of homes into bank ownership slowed markedly because of time-consuming efforts to figure out which distressed borrowers could qualify for programs that attempt to avert foreclosures by reducing monthly payments. Meanwhile, brisk demand from investors and first-time home buyers helped banks unload many of the homes they held.Now the supply is rising again because banks are determining that many homeowners don’t qualify for loan modifications and are completing more foreclosures. Home sales also have slowed in recent months.
By James R. Hagerty, March 19, 2010, WSJ