The underlying data tells a different story, however.
More than half of the country’s foreclosure activity in May 2008 was tied to just 4 states in the union:
- California (28 percent)
- Florida (14 percent)
- Arizona (5 percent)
- Michigan (5 percent)
In other words, the majority of mortgage defaults are coming from a small minority of states.
See, between 2002 and 2006, California, Florida and Arizona were very popular with real estate speculators, many of whom over-extended themselves on real estate; and Michigan’s economy has been decimated by job losses in the auto and manufacturing industries.
In addition, these 4 states are among the nation’s most populous. It makes sense that they are distorting the national statistics.
On a local level, the news is not so grim. Not only did 20 states show a reduction in monthly foreclosure activity, but many more fell below the national foreclosure average. That type of story, though, doesn’t make for good headlines, is all.
Search the full May 2008 foreclosure report for yourself on RealtyTrac’s Web site.