NEW YORK – U.S. home foreclosures climbed in March, as subprime borrowers struggled to keep up with their monthly payments to lenders, real estate data firm RealtyTrac said Wednesday.
Home foreclosures rose 7 percent from February to 149,150. The figure, which comprises default notices, auction sale notices and bank repossessions, was 47 percent higher than a year ago, RealtyTrac said.
"Right now foreclosures are running ahead of our projection. That's due to the combustible mix of mortgages," said Rick Sharga, RealtyTrac's vice president of marketing. "Subprime mortgages are performing atrociously."
The upward spike renewed worries about the housing market and whether problems with home loans made to subprime borrowers, or those with poor credits, could choke off economic growth.
The RealtyTrac report in part helped spur buying of U.S. government bonds amid hopes that a worsening housing market would cause the Federal Reserve to lower interest rates.
On the other hand, stock players shrugged off the RealtyTrac data and focused on upbeat earnings, which lifted the Dow Jones Industrial average to a record high.
RealtyTrac's foreclosure data go back only 27 months, but they suggest that subprime homeowners are struggling, especially in California and the Midwest, Sharga said.
California was a hot-bed of the subprime lending boom, while the Midwest has been suffering from a continuing leakage of manufacturing jobs, according to Sharga.
It is unclear whether the surge in foreclosures in the first quarter would continue. Last year, a spike in the first quarter leveled off through the second and third quarters.
"This year's spike is a little more than what we had seen last year," Sharga said. "A lot depends on the spring and summer home sales."
Based on March's data, home foreclosure filings would total 1.6 million in 2007, above RealtyTrac's forecast of 1.5 million and the 1.2 million in 2006.
While California and the Midwest have high concentrations of foreclosure filings, Nevada posted the highest rates of the 50 U.S. states for a third straight month, with Las Vegas posting the second-highest rate of cities RealtyTrac monitors.
In March, Nevada reported 4,738 filings, more than triple the number in March 2006. Its foreclosure rate showed 1 filing for every 183 households, more than four times the national rate of 1 per 775 households, according to RealtyTrac.