Foreclosure fillings in the U.S. fell 34% year-over-year in August, according to the latest data from RealtyTrac.
Largely falling foreclosure starts in August drove the decrease in foreclosure activity, with 55,775 properties starting the foreclosure process during the month, down 44% from a year ago — the lowest level since December 2005.
"The foreclosure floodwaters have receded in most parts of the country, but lenders and communities continue to clean up the damage left behind, which means the recent uptick in bank repossessions is a trend that will likely continue into next year," said vice president Daren Blomquist.
He added, "Meanwhile foreclosure flash floods will continue to hit some markets over the next few months as delayed foreclosure starts are quickly pushed into the pipeline. This was the case with the jump in Nevada foreclosure starts in August."
Foreclosure starts decreased in 38 states in August, including both nonjudicial and judicial states, including Colorado, Arizona and Massachusetts, down 80%, 65% and 66%, respectively.
On the other hand, foreclosure starts increased month-over-month in 17 states, including Nevada, Maryland and California, up 226%, 44% and 24%, respectively.
"As home prices continue to increase, we have noticed an increase in lenders taking action on delinquent mortgages," said Michael Mahon, executive vice president and broker at HER Realtors.
He added, "Due to lack of inventory during the summer months, there is a current demand amongst buyers who are ready, willing and able to purchase new inventory being introduced to the market."
Meanwhile, bank repossessions increased 6% in August, but were down 25% from a year ago.
Real estate-owned property activity increased from the previous month in 26 states and was up from a yea ago in 23 states, including New York, New Jersey and Florida, up 123%, 63% and 48%, respectively.
National Association of Realtors spokesperson Walt Molony explained that the market has recovered much of the equity that was lost during the housing crisis, leading to an overall market improvement.
"Other factors contributing to a decline in foreclosures include an improving economy, creation of jobs – even thought its less than what we would like to see – and improved personal financial conditions," he stated.
On a state level, Nevada’s foreclosure rate ranked highest nationwide, supplanting Florida at the highest spot.
"The increase in defaults is most likely tied to the implementation of two new laws in Nevada, SB 300, which took effect June 1, and the Nevada Homeowner Bill of Rights, which will take effect on October 1," said Craig King, COO of Chase International.
He concluded, "Banks are in the process of interpreting the new laws and making necessary changes in their documentation, and have said it will take some months to sort through the changes. During this process there will probably be significant volatility in foreclosure-related activities."