Foreclosure starts in August sank to their lowest level in more than 18 years, according to the latest First Look report from Black Knight.
Foreclosure starts fell to 36,200 for the month, down more than 23% from the same time last year, the report showed. This is actually the lowest number for any single month since December 2000.
In fact, the number of loans in active foreclosure continued to improve, dropping to 253,000. This represents the smallest level since 2005.
And even as foreclosures are decreasing, low interest rates are making their market and increasing prepayments by 5% from July to August, marking a three-year high. August’s prepayment rate increased 62% from August 2018, and was up 250% from the 18-year low hit back in January this year.
Black Knight’s report showed that, given a 30 to 45 day closing window, August’s prepayment activity could reflect the interest rates reached in June and July. Rates didn’t fell to their most recent lows until August and September, which means the peak in refinance-driven prepayments is likely still to come.
However, other reports show August actually saw an uptick in foreclosure activity.
New data from ATTOM Data Solutions showed that foreclosure activity increased slightly in August, but is still down nearly 25% from last year.
ATTOM's report shows that there were 53,007 properties with foreclosure filings in August 2019, up 4% from July 2019 but down 24% from a year ago.
In 2018, there were more than 600,000 American homes in foreclosure. While this total seems large, it actually represents the lowest rate of default since the nation’s financial crisis.
For comparison, in 2010, which is when the nation’s foreclosures peaked, there were about 2.9 million American homes facing a foreclosure, according to LendingTree.
