The popular press would like each of us to think that our suburban neighborhoods will soon be abandoned because of a flurry of foreclosures. While foreclosure rates are up versus last year, the actual rate of foreclosures remains very low. According to RealtyTrac, approximately 1 in 961 homes will go into foreclosure. That means that less than .1% of home owners will default on their loans. In Texas and California, two large states with the largeset number of foreclosures the rate is only .2%. While none of us like to see people lose their homes, this low percentage clearly shows that it is not an epidemic like the media would like us to think.
The California Association of REALTORS recently released their 2007 economic forecast. While inventory levels are up slightly over the 20 year average, foreclosures are actually at almost historic lows. In 1997, the foreclosure rate hit its 25 year high at 2%.
While foreclosures at any level are not very fun, it’s important to keep the growth in foreclosures in perspective.