Home foreclosure filings fell in November from October, though they may remain at elevated levels as rising payments on adjustable loans pressure borrowers, a real estate data company reported on Wednesday.
The hardest-hit states were Nevada and Florida, where price gains were among the strongest during the housing boom.
Lenders filed 201,950 foreclosure filings last month, down 10 percent from October, for a foreclosure rate of one in 617 households, according to RealtyTrac. Total filings were up almost 68 percent from November 2006, said the firm, which markets foreclosed houses.
Soaring foreclosures have set regulators and lawmakers scrambling to curb the trend, which many economists say could tip the U.S. economy into recession. Plans that make it easier to get a government-insured loan or would freeze interest rates for some subprime borrowers will slow foreclosures, analysts say. But many homeowners remain vulnerable to default.
The decline in November follows a 2 percent increase in filings in October and an 8 percent fall in September.
"This could indicate that foreclosure activity has topped out for the year, but the true test of whether this ceiling will hold will come at the beginning of next year" when a seasonal increase tends to occur and rates on more mortgages are to rise, James Saccacio, chief executive officer of Irvine, California-based RealtyTrac, said in a statement.
About $500 billion in adjustable-rate mortgages are due to reset at higher levels in 2008, according to JPMorgan.
States with strong price gains during the boom are seen leading a drop of as much as 15 percent in national home prices by 2009, according to UBS economists.
In Nevada and Florida, annual price gains approached 20 percent and 30 percent, respectively, at the height of the housing boom in 2005. Nevada topped the list of foreclosure rates for the 11th month, with one filing for every 152 households, RealtyTrac said. The rate, based on a 1 percent rise from October, is more than four times the national average.
In Florida, filings declined 3 percent, but the Sunshine State still had one filing for every 282 households, the data showed.
Ohio, beset with a shaky economy, had the third-worst rate of foreclosures in November, with one filing for every 307 households. However, total foreclosures in Ohio declined 6 percent from October.
Among cities, Stockton, California, posted the worst foreclosure rate, with one in every 99 homes, the report showed. The top 10 cities included four others in California, as well as Las Vegas, Nevada.