American home foreclosures leap 93% in a year

Angela Balakrishnan
Wednesday August 22, 2007
The Guardian

Nevada is bearing the brunt of the crumbling US housing market, with about one in every 200 households filing for foreclosure, a survey showed yesterday.

RealtyTrac, an online marketplace for repossessed properties, showed US home foreclosures jumped 9% in July from June, and 93% on a year ago.

The number of default notices and bank repossessions totalled 179,599. Across the US, there is now a foreclosure of one in every 693 homes.

While Nevada had the highest foreclosure rate for the seventh month in a row, one in 199 households, Florida and California led the way for the greatest number of loan defaults. The so-called Sunshine and Golden states had enjoyed the biggest gains from the red-hot housing market in recent years. Filings in California in July were 39,013, about three times as many as the same month last year.

Michigan also suffered. In Detroit, its largest city, foreclosures in July were 70% up on June.

"We are estimating that we will see about 2m foreclosure filings this year," said Rick Sharga, spokesman for RealtyTrac. " We don't see it getting much better before it gets a little bit worse."

Only seven states escaped a year-on-year increase in foreclosure activity.

James Saccacio, chief executive of RealtyTrac, said states that avoided the housing market boom have fared best but could now be drawing investors out of other volatile markets where house price appreciation seems to have hit its peak. "States like Texas, South Carolina and Utah have seen slow but steady price appreciation over the past five years, making them much more attractive and affordable," he said.

Only a few of the worst-hit regions are economically deprived areas - historically the kind of places that produced the highest rates of foreclosures.

An increase in foreclosures will drive up the glut of homes for sale. The National Association of Realtors said US home sales dropped to a four-year low in the second quarter and prices fell in a third of US cities.

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