Shadow inventory -- also often known as “pending supply” -- dropped to the lowest level since August 2008, to 1.7 million homes, CoreLogic reports in its latest report. The shadow inventory is down 24 percent compared to year-ago levels.
CoreLogic estimates shadow inventory by the number of properties that are seriously delinquent in foreclosure or held as REO by a mortgage servicer but not currently listed on the MLS.
“Nationally, loan performance continues to improve,” says Mark Fleming, chief economist for CoreLogic. “The rate of seriously delinquent loans is at a new five-year low, down 26 percent relative to a year ago. The shadow inventory continues to decline as well, decreasing at an average monthly rate of 46,000 units over the last year. Healthy market levels of shadow inventory are around 650,000 units, so there is more to be done, but the trend is in the right direction.”
In November, completed foreclosures were down 29 percent year over year. But foreclosures are still elevated by historical standards. In November 2013, there were 46,000 completed foreclosures, but between 2000 and 2006, completed foreclosures averaged 21,000 per month nationwide.
While the foreclosure pipeline is gradually clearing, many home owners across the United States are still struggling to make their payments. About 812,000 homes in the United States were in some stage of foreclosure in November 2013. The percentage is down by 34 percent from a year earlier when foreclosure inventory stood at 1.2 million.
The five states with the highest foreclosure inventories as the percentage of all mortgaged homes are: Florida (6.6 percent), New Jersey (6.5 percent), New York (4.7 percent), Maine (3.5 percent), and Connecticut (3.5 percent).