If you’re in the market for a bargain-priced foreclosure, it may get a little easier to find what you’re looking for. Home repossessions, which had been on the decline for five consecutive months, are rising again. If the economy and housing market is improving, why the increase? Banks are processing foreclosures faster now that there’s such a limited inventory of distressed properties and prices are climbing.
In all, lenders took back nearly 39,000 residential properties in May, up from about 35,000 in April, according to foreclosure-tracking company RealtyTrac. Homeowners who haven’t paid their mortgages for months – some for years – are now receiving notices that their lenders are ready to proceed with repossession.
What does this mean to home buyers? It means in most areas of the country, there is still a significant opportunity to buy a discounted distressed property. Bank-owned homes and short-sale properties aren’t as plentiful as they once were. But they are still a significant part of the market in most areas. For all of 2013, banks are on track to take back 500,000 properties, compared with 671,251 in 2012.
Whether you’re looking to purchase a distressed property as a rental or as a fix-and-flip project, two factors are working in your favor in a big way: Low mortgage rates and lower home prices. Although home prices in most areas of the country are increasing, they remain in most cases well below peak levels. And mortgage rates are better than they have been for much of the past three decades. Simply put, it’s a great time to buy.