Foreclosure Rate Double That of a Year Ago

RealtyTrac reported that the rate of foreclosure filings in December 2007 were 97% that in December 2006. The total foreclosure rate for all of 2007 was 75% higher than 2006. This means that foreclosures are increasing at a rapid rate. In total, during 1% of homes were in foreclosure, up from .58% in 2006. (Source: RealtyTrac, U.S. Foreclosure Activity Increases 75% in 2007, January 29, 2008)

What It Means to You

According to the Center for Responsible Lending, foreclosures will increase by 1 - 2 million over the next two years, according to the Center for Responsible Lending. That's because an estimated 450,000 subprime mortgages will reset each quarter and borrowers won't be able to refinance as they expected, due to lower home prices and tighter lending standards.

According to the Center's research, these foreclosures will depress the prices in their neighborhoods by a total of $202 billion. In other words, 40.6 million homes will lose an average of $5,000 each. (See Center for Responsible Lending, Subprime Spillover, January 18, 2008)

What can you do? RealtyTrac offers a free search for foreclosed homes by zip code. (See Search Foreclosures Nationwide).

More on Real Estate and the Economy

• How Does Real Estate Affect the U.S. Economy?
• Definitions of Commonly Used Real Estate Terms
• A Primer on Interest Rates

If you are selling your home, here are some great tips from the About.com guide to Homes, Elizabeth Weintraub.

• Selling in a Falling Market
• Avoid Mistakes When Selling in a Slow Market
• When Is the Time Right to Reduce Price?