Foreclosures in the U.S. have dropped for the second straight quarter since the housing collapse began in 2006, but the coast is not clear yet a banking group said Wednesday. They warned that the number of newly delinquent homeowners rose in the same time period.
Foreclosures declined from 4.63% to 4.57% in the first quarter. The Mortgage Bankers Association said this is partially due to efforts from landers to ease payments for homeowners and the impact of temporary home purchase tax credits.
The MBA warned that foreclosures could inch higher in the future.
"On the surface, there is good news on the foreclosure front, but not on short term delinquencies," Brinkmann said. "There's a little pause. It could be short term factors instead of a trend."
Loans that were at least 90 days past due or in foreclosure fell 0.43 percentage point to 9.11 percent.
Foreclosures have also taken a toll on consumer confidence and are steering buyers away from the market as they expect the supply to pressure prices still lower, economists said.
Housing reports this week showed home re-sales plunged in July beneath already bearish expectations to their slowest pace in 15 years, while new home sales slumped last month to the worst level since the Commerce Department began collecting the data in 1963.
Home purchase tax credits offered by the U.S. government, now expired, may have helped lower foreclosure data as troubled borrowers sold their property, Brinkmann said.
"That impact is not going to continue, so we'd have to keep an eye on that," he said.
