More homeowners are making their monthly mortgage payments and avoiding foreclosure, as fast-rising home prices are easing the number of underwater loans.
Mortgage lenders filed 25,747 notices of default during the second quarter, a 38.7% increase from the first quarter – but also the second-lowest filings in seven years, according to DataQuick. The just-completed quarter is off 53% from second-quarter 2012.
First-quarter filings were the lowest since fourth-quarter 2005, according to the San Diego-based industry tracker.
“At this point in the cycle, it’s fairly straightforward to see what’s going on,” says John Walsh, president of DataQuick. “Just do the math, it’s not calculus, it’s fourth-grade arithmetic. A foreclosure only makes sense when the home is worth less than what is owed on it. As home values rise, fewer homeowners owe more on their homes than the homes are worth.”
California’s median-home price climbed 14.7% to $344,000 during the second quarter, compared to $300,000 in the first quarter, according to DataQuick (the California Association of Realtors has a much higher median price for the quarter). And current home prices are up 27.4% from the $270,000 a year ago.
The state’s median price peaked at $485,000 in second-quarter 2007, and bottomed at $235,000 in second-quarter 2009, according to DataQuick.
San Francisco, Santa Clara and San Mateo counties boasted the lowest percentage of homes falling into foreclosure, while Fresno, Riverside and Solano counties were the highest.
Counties with the most-affordable homes – below $200,000 – were the most likely to endure foreclosures, according to DataQuick.
About 2.2 homes per 1,000 homes entered foreclosure in the most-affordable ZIP codes. Only 1 per 1,000 homes entered foreclosure in homes priced from $200,000 to $800,000, and a paltry 0.3 per 1,000 homes in neighborhoods of $800,000-plus properties.