Foreclosures jumps 50%; Ohio, Michigan lead

4/8/2005

In what could be a sign of trouble in the housing industry, the number of foreclosed homes put up for sale rose 50 percent between February and March, according to a new study by Foreclosure.com.

Leading the nation in those sales: Ohio and Michigan.

The national increase is one of the biggest monthly spikes the foreclosure listing service has seen since it began tracking the market in 1999.

Jim Houston, vice president of Foreclosure.com, said the increase is likely due to a rise in interest rates during the latter half of 2004 and a slowdown in home price increases. It's possible, he said this is a sign that the market is turning, but it's too early to state that definitively.

The survey, released this week, showed 28,190 foreclosed homes were put up for sale across the country in March, which is 50 percent more than in February.

Markets experiencing the largest number of foreclosed properties are those whose home values have stopped rising, such as Ohio and Michigan.

Ohio had the most new foreclosures last month of any state, at 2,470, for a total of 7,518 properties in foreclosure. Michigan was next highest with the new listings, at 2,390, for a total of 6,480. The total properties in foreclosure in Ohio and Michigan trail only those in Texas, which has 9,996, according to Foreclosure.com.

The national total number of foreclosed properties available for sale stood at 80,757 at the end of March, up 10 percent from the previous month. The number of foreclosed properties rose in 47 states.

The listing service tracks government and financial institutions when gathering data on foreclosed properties.

Fitch Ratings analyst Bob Curran was surprised at the national jump in figures, but noted that foreclosed properties represent a very small percentage of the overall housing inventory, which totaled 2.8 million homes in February. He said the latest figures were not a reason to be alarmed.

"It may simply reflect our overleveraged society and the fact that people are carrying more debt on everything and it doesn't take a lot to affect a small percentage of them in terms of moving them from homeownership to not," Mr. Curran said.