Foreclosure rates continue to fall in the Los Angeles area while also remaining below the national average. While this may be bad news for those who were hoping to find a good deal in Los Angeles real estate, the foreclosure slowdown is just one more sign that the area’s economy is on the mend and growing stronger.
Foreclosures in Los Angeles
During the month of September, foreclosure rates in Los Angeles were below the rate that the were during the same time last year. In September of this year, the rate of Los Angeles-Long Beach-Glendale area foreclosures among outstanding mortgage loans was just 0.52 percent. This represents a 0.14 percent decrease when compared to September 2014, at which time the rate was 0.66 percent. It also represents a slight drop when compared to the previous month, with the August foreclosure rate being 0.53 percent.
The falling rates in September represent a trend that has been occurring since the beginning of the year. While January foreclosure rates were 0.62 percent and February foreclosure rates were slightly higher at 0.63 percent, they have exhibited a downward trend ever since. In March, for example, they fell to 0.61 percent, while April’s foreclosure rates were at 0.58 percent. In May and June the rates held steady at 0.55 percent.
Mortgage Delinquency Rates in Los Angeles
As would be expected along with a decline in foreclosure rates, the Los Angeles area is also experiencing a drop in the mortgage delinquency rate. During the same time period as foreclosure rates were falling, only 1.90 percent of mortgage loans were 90 days or more delinquent. Compare this to the same time last year when the same was true of 2.47 percent of mortgage loans, representing a 0.57 percentage point drop.
National Foreclosure Rates
Looking at the broader picture, national foreclosure rates also dropped in September when compared to last year. Not only did the foreclosure inventory fall by 24.3 percent when comparing September 2015 to September 2014, but the completed foreclosure rate fell by 17.6 percent to 55,000. As the rate of delinquencies continues to drop, it draws closer to the historic norms that are experienced during improved economic conditions. The drop in foreclosure rates can also be at least partially attributed to the tighter underwriting standards that have been put in place since the recession. As such, as we move into 2016, the fundamental metrics used to measure the health of the housing market are stronger than they have been since 2007.
As foreclosure rates fall in the Los Angeles area, home prices are on the rise. The tighter home inventory pushed prices up 0.8 percent in September when compared to last year, while October saw a 6.8 percent increase when comparing year-over-year data. With prices on the rise, anyone who is interested in purchasing property in Southern California would be wise to make a purchase sooner than later. To learn more about available properties in the Los Angeles area, contact our team of professional real estate experts. We specialize in luxury properties within the area’s most prestigious communities.
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