The foreclosure market is expected to see a boom in inventory levels later this year as the millions of American homes held up in foreclosure proceedings are dumped onto the market. The rate of foreclosed homes coming to market has slowed in recent months as paperwork and processing delays have held up property repossessions by the nation’s lending institutions. This so-called “shadow inventory” of homes, or distressed properties expected to fall victim to foreclosure, is estimated to consist of well over one million single-family homes in neighborhoods all over the country.

Home builder confidence in the market for newly-built, single family residential properties continues to be lacking as the general mood among those in the trade remains pessimistic. The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today pegs the level of confidence at 16 on a scale of 100.

Want to buy a house cheap? Buy a foreclosed home. According to recently-released statistics, residential real estate properties in the foreclosure process sold at an average discount of 28% for the 2010 calendar year.

The number of foreclosures in California is expected to remain high throughout the year as homeowners and investors deal with continued high unemployment rates, more strict refinancing qualification requirements, and depressed home valuations. Currently as many as five million homeowners are 2 or more months late on mortgage payments with still more expected to miss or be late on loan payments as the year goes on.
Number of REO Homes Expected to Rise