Home defaults fall again

Foreclosure filings declined nationally in October for the third consecutive month but remained 19 percent higher than in the same month in 2008, RealtyTrac Inc., of Irvine, Calif., reported yesterday.

There was one filing for every 386 houses in the United States during the month, with the majority still centered in the Sun Belt states that suffered the most from the subprime-mortgage meltdown.

Last month's filings were down 3 percent from September.

Pennsylvania was 32d on the list of 50 states, with one foreclosure filing for every 988 houses in the state; New Jersey was 13th, with one in 471.

RealtyTrac reports that 0.42 percent of Philadelphia-area households are in foreclosure - less than the second-quarter 2008 peak of 0.64 percent and below the worst areas, such as Phoenix (2.43 percent) and Las Vegas (5.13 percent).

"Three consecutive monthly declines is unprecedented for our report, and on first blush an indication that the foreclosure tide may be turning," said RealtyTrac chief executive officer James J. Saccacio.

But he cautioned, "The fundamental forces driving foreclosure activity in this housing downturn - high-risk mortgages, negative equity, and unemployment - continue to loom over any nascent recovery."

Government efforts to reduce the record number of mortgage foreclosures in the last nine months have borne some fruit, with agreements reached between borrowers and lenders on 650,000 trial loan modifications.

With the number of filings up year over year, Saccacio and others do not see these modification efforts having much of an effect in the states most affected by the two-year-old housing downturn.

Though foreclosure filings are lower, distressed properties still attract an ever-larger share of investors.

An October survey by Move Inc., a real estate search engine, showed that the number of people interested in investing in real estate had doubled since March to 12.1 percent from 5.6 percent.

More than 1,000 people nationally were interviewed for the survey.

Almost a quarter of prospective buyers believed prices were as low as they would go, the survey showed, pushing them into the market.

Mortgage rates also continue to drop. Freddie Mac, the government-supported mortgage purchaser, said yesterday that the average 30-year, fixed-rate mortgage in the United States fell this week to 4.91 percent from 4.98 percent last week. A year ago, the average was 6.14 percent.

The survey showed that most important reasons motivating prospective home buyers and investors to purchase a house include concerns that prices are as low as they will go (23.6 percent) and desire to take advantage of foreclosure bargains (18.7 percent).

Prices in the 10 largest U.S. cities have fallen 32 percent during the downturn, according to S&P's Case-Shiller Index, although data collected over the last few months show declines slowing in some hard-hit areas and prices rising in others.

The index does not cover the Philadelphia region, which has had modest increases in home values in the last two quarters - 3.8 percent in the second quarter and 0.7 percent in the third, according to data analyzed by Econsult vice president and economist Kevin Gillen.

The two quarterly increases have helped trim the cumulative price decline here since the housing boom ended to 10 percent, Gillen said, compared with 32 percent in 10 other major cities tracked by the Case-Shiller index.

Some other indicators that the region's housing market may be nearing a turning point appeared in third quarter data as well, he said.

Continued growth in sales activity has reduced the supply of house on the market to nine months from 16 months a year ago, Gillen said.