Foreclosures Fall to Pre-Crisis Levels

After a wave of promising news to come from the American economy from lowered unemployment filings to increased domestic retail demand, a new sign of economic health has arrived: total filings of foreclosures in 2011 fell to the lowest level since 2007. Default notices, auctions, and bank reposessions have fallen 33% to reach 2.7 million, according to online foreclosure site RealtyTrac. Foreclosures have been falling steadily for a while, with a month-on-month new foreclosure rate decrease of 8.63%, with 205,024 new foreclosures hitting the market. The average sales price also rose by 8.53% to $183,393, according to data made available by RealtyTrac. The drop means that foreclosure rates have fallen to levels not seen since before the market crash of 2008. However, foreclosures still remain at historically unprecedented levels, with 1 in every 634 housing units in the U.S. filing for foreclosure in December 2011. Nevada leads the nation in foreclosures, at a rate of 1 in 177 homes. California has the most amount of foreclosures, with over 52,000 units hitting the market. The slower foreclosure rate is not all good news. Foreclosures are being processed much slower than in recent years, after legal challenges to "robo-signing" procedures questioned banks' tactics in repossessing properties. This has prompted banks to check paperwork more carefully, causing a backlog of foreclosure cases. Foreclosures are now being processed more slowly, at an average rate of 348 days during Q4 2011, up from 305 days in 2010. The Federal Reserve has promised to keep lending rates low while the economy recovers, which has had limited impact on the housing market. 71% of mortgages in 2011 were refinancings.