Sales of bank-owned homes have plunged to a five-year low, the latest evidence that the nation's foreclosure woes are easing as the U.S. housing market recovery gains momentum.
For the January-March quarter, sales of bank-owned homes fell 16 percent from the previous three months and were down 23 percent versus the first quarter of 2012, foreclosure tracker RealtyTrac Inc. said Thursday.
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The last time sales of bank-owned homes were lower was in the first quarter of 2008, the firm said.
Sales of homes in a stage of the foreclosure process also declined, falling 20 percent from the October-December quarter and the first quarter of last year.
Combined, bank-owned homes and properties already in the foreclosure process also accounted for a smaller share of U.S. home sales in the first quarter. They made up 21 percent of all home sales, down from 25 percent in the first three months of 2012, RealtyTrac said.
Foreclosure-related sales' share of all U.S. home sales peaked in the first quarter of 2009 at 45 percent.
The decline in foreclosure-related sales comes as sales of previously occupied homes have risen nearly 10 percent over the past 12 months. Greater demand and a scarcity of available homes for sale in many markets have helped propel U.S. home prices upward.
Earlier this week, the latest Standard & Poor's/Case-Shiller home price index showed U.S. home prices jumped nearly 11 percent in March versus a year earlier, the biggest 12-month increase since April 2006.
Rising home values make it easier for borrowers to refinance their mortgages or sell their homes if they lose their jobs or otherwise become unable to make payments, increasing the chance they will avert foreclosure.
That's been a key factor in the steady drop in U.S. homes completing the foreclosure process. That means fewer properties ending up as bank-owned homes.
Nationally, the homes repossessed by banks fell 20 percent in April from the previous month, and were down 32 percent from a year earlier, while fewer homes entered the foreclosure process, according to RealtyTrac.
All told, 190,121 U.S. bank-owned homes or properties in some stage of the foreclosure process were sold in the first quarter.
Georgia had the biggest share of foreclosure-related sales at 35 percent, followed by Illinois with 32 percent and California with 30 percent. Foreclosure-related sales made up less than 10 percent of all home sales in Massachusetts, New York and New Jersey, the firm said.
Bank-owned homes sold, on average, for $147,810 in the first quarter. That translates to an average discount of 38 percent compared with the average sale price of homes that were not foreclosure, RealtyTrac said.
That's a bigger savings than a year earlier, when it the discount was 34 percent, but down from 39 percent in the last three months of 2012.
Homes already in the foreclosure process sold, on average, for $187,040, which amounts to an average discount of 22 percent versus homes not in foreclosure. That's up from an average savings of 20 percent a year earlier.