Soft housing demand and tepid recovery remain concerns, but the industry outlook is improving a little. The number of mortgages on which lenders initiated foreclosure dipped to the lowest level in seven-and-a-half years in March, according to a new Black Knight Financial Services report.
The data show that banks started foreclosure proceedings on 88,000 residences that month, a more than 27 percent decrease from a year earlier and significantly lower than the 316,000 in March 2009. Black Knight also determined that the percentage of mortgages that are delinquent is also on the decline, meaning that foreclosure activity should continue on its downward trend. An estimated 2.1 percent of all mortgages were in some stage of foreclosure at the end of this year's first quarter -- the lowest level since 2008. Another 55 percent of all borrowers were at least one month behind on their loans but not in foreclosure, which is the lowest level since 2007.
Additionally, the share of U.S. homeowners who are "underwater," meaning they owe more on their mortgage than the property is worth, has fallen to 10 percent from 30 percent four years ago.