The U.S. home-vacancy rate, a measure of the share of properties empty and for sale, fell to 2.6 percent in the first quarter as foreclosures slowed amid a lender backlog in processing paperwork.
The rate, down from 2.7 percent in the fourth quarter, is based on 2 million vacant properties for sale out of 74.5 million residences, the Census Bureau said today. A gauge measuring the share of people who own their homes dropped to 66.4 percent, the lowest since 1998, according to the report.
Property seizures plunged at the end of 2010 as lenders including Bank of America Corp. and JPMorgan Chase & Co. temporarily halted proceedings to review their handling of court documents. That left more homes in the foreclosure process with their status unresolved, typically with their owners still in residence. Borrowers in foreclosure were in their homes for an average of 537 days in February, a record, according to Lender Processing Services Inc. in Jacksonville, Florida.
“The legal problems with foreclosures and how things have slowed down would have an effect on the vacancy rate as opposed to when foreclosures were going full steam ahead,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York.
U.S. foreclosure filings dropped 27 percent in the first quarter from a year earlier to the lowest level since 2008 as lenders worked through their paperwork backlog, according to RealtyTrac Inc. of Irvine, California.
Falling Home Ownership
The home-ownership rate dropped from 66.5 percent in the last three months of 2010. It has fallen for every quarter since mid-2009, according to Census data. The rate reached an all-time high of 69.2 percent in 2004 as relaxed lending standards fueled home sales and President George W. Bush promoted an “ownership society” in his re-election bid.
The residential vacancy rate reached a record 2.9 percent in the first and fourth quarters of 2008, the year Lehman Brothers Holdings Inc. collapsed and American International Group Inc. was taken over by the government.
Attorneys general across the U.S. and federal regulators began separate probes of the mortgage-servicing industry late last year amid allegations of shoddy foreclosure practices such as robo-signing, or using workers with little or no training to sign thousands of documents filed in support of property seizures without reading them. The investigations were broadened to include all aspects of the servicing business.
Earlier this month, regulators announced settlements with the 14 largest U.S. mortgage servicers. The companies agreed to review all foreclosed loans from 2009 and 2010, and pay back losses in cases that were mishandled. They also will improve procedures by hiring staff, upgrading document-tracking systems and assigning a single point of contact for each borrower. The banks didn’t admit or deny regulators’ findings.
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