The foreclosure inventory has fallen to its lowest level in five years, and fewer borrowers are falling behind on their mortgage, according to Mortgage Bankers Association data released Thursday.
The housing market recovery and the recent jump in home prices are helping resolve the backlog of troubled mortgages, said Michael Fratantoni, the association’s vice president of research and economics.
The percentage of delinquent loans — loans that are behind by at least one payment — decreased to a seasonally adjusted rate of 7.25 percent in the first quarter, compared with 7.4 percent in the same period last year. The percentage within the foreclosure inventory fell to a seasonally adjusted rate of 3.55 percent in the first quarter, down from 4.39 percent a year ago and the lowest level since 2008.
Both the foreclosure inventory and delinquency rates are bouncing back to pre-crisis levels, Fratantoni said. “The main thing we need to continue improvement in the housing market is stronger job growth,” he said.
The foreclosure rate fell the most in states such as Florida, California and Nevada, which are seeing thousands of distressed homeowners move through the foreclosure process and a rapid increase in home prices.
The foreclosure inventory shrunk in the District and Virginia, and in both jurisdictions, it was below the national average of 3.55 percent of mortgages. The inventory stood at 2.48 percent in the District and 1.25 percent in Virginia. But the percentage of mortgages making their way through the foreclosure process in Maryland grew in the first quarter and remains above the national average, at 4.11 percent.