TINY NUMBERS MAKE FORECLOSURE INCREASES LOOK HUGE
February 29, 2008
A recent report on mortgage foreclosure by RealtyTrac, a firm that compiles data on home foreclosures, had some dismal news. But a close look at the data also provides some reassuring information, says Scott Burns in the Dallas Morning News.
- While the national rate of foreclosure had increased by a whopping 79 percent in the previous year, it was still only 1.033 percent.
- Since about 30 percent of homes are owned mortgage-free, this means that for all the noise about a crisis, only seven-tenths of 1 percent of all homes are in foreclosure.
- In the top 100 housing markets, the average foreclosure rate was somewhat higher, 1.38 percent; and it was up 78 percent over the previous year.
- If you rank-ordered the list of the top 100 areas, only 34 had foreclosure rates above the group average.
- Fifty-one areas had rates of 1 percent or less; foreclosure rates actually fell in 14 of the 100 areas.
More important, many of the areas suffering the highest increases in the foreclosure rate were rising off a rate that was tiny. For example:
- The Bethesda, Md., area saw foreclosures rise 1,288 percent -- to a rate of 0.682 percent.
- In other words, foreclosures there were virtually nonexistent last year; today they are still well below the national average.
- The same can be said for the Albany, N.Y., area (up 638 percent to 0.25 percent), the Baltimore area (up 544 percent to 0.73 percent) and the Providence, R.I., area (up 354 percent to 0.41 percent).
Source: Scott Burns, "Tiny numbers make foreclosure increases look huge," Dallas Morning News, February 24, 2008.
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