Thursday, June 14, 2007

Foreclosures jumped 90% in May

Home foreclosures increased 90% from a year earlier in May, according to RealtyTrac data. The total of 176,137 foreclosures was 19% higher than the April number. Economists fear that the rate of foreclosures will accelerate in the coming months, which will pour additional homes on the already glutted market, all this amidst what turned out to be a not-so-robust-at-all spring/summer buying season. Such a scenario spells serious trouble for home builders, many of which are experiencing financial difficulties and even closing doors.

On average, there was 1 foreclosure for every 656 U.S. households in May, the highest total filings being in California, Florida, Ohio, Texas, Michigan and Georgia. Home prices, however, have not yet seen sharp drops. They have declined somewhat, but not enough to lure large numbers of buyers to the market. With less cash in their homes and less credit available, consumers hesitate to purchase Real Estate now.

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