Foreclosure Inventory at Nine-Year Low

The national foreclosure inventory in May was 575,000, or 1.13 percent of all U.S. homes, according to the First Look Mortgage Monitor published by Black Knight Financial Services (BKFS).

Last month’s foreclosure inventory level was 3.55 percent below the April level and down 29 percent from a year ago—and also represented the lowest number of loans in active foreclosure since the summer of 2007.

However, Black Knight reported 62,100 foreclosure starts in May, a 5.79 percent increase from April. Nonetheless, this was also 20 percent below the May 2015 level. And the monthly prepayment rate increased to 1.30 percent in May, up 3.31 percent from April but down by 2.40 percent from a year ago. Mortgage delinquencies were slightly higher month-over-month, with a scant 0.36 percent uptick to 4.25 percent, but, remained 13.47 percent below the May 2015 level.

The states with the highest percentage of non-current loans were Mississippi (11.09 percent), Louisiana (9.13 percent), New Jersey (8.86 percent), Maine (7.85 percent) and Alabama (7.85 percent).

"It's normal seasonal behavior for delinquencies to hit their calendar year low in March and then gradually climb throughout the summer and fall months," said Black Knight Senior Vice President of Data and Analytics Ben Graboske.