Given that interest rates, home inventories, and average home prices are all favorably positioned for home buyers, why does the housing market continue to muddle about? One of the bigger reasons is distressed homes.
Distressed homes are properties that are under foreclosure or impending foreclosure because the homeowners have been unable to make their payments.
When this happens, home prices take a hit, which is great for buyers but bad for sellers and in most cases, people who want to buy a new Louisville home must first sell their current Louisville home.
CoreLogic published this data yesterday regarding foreclosures in Metro Louisville.
…the rate of foreclosures among outstanding mortgage loans is 2.67 percent for the month of November 2010, an increase of 0.42 percentage points compared to November of 2009 when the rate was 2.25 percent.* Foreclosure activity in Louisville-Jefferson County is lower than the national foreclosure rate which was 3.48 percent for November 2010, representing a 0.81 percentage point difference.
So while Louisville is doing better than the national average, the rate has increased steadily over still January 2009 when it was just 1.83%.
If you look at the delinquency rate, which partially predicts future foreclosure numbers, there’s some good news. This rate for November 2010 dropped to 5.84% compared to 6.05% for the same period last year. That means we could be at the bottom with improvement in the foreclosure numbers right around the corner.
Update: Fox41 is reporting that banks saying fewer consumer loans are going bad.