Predictions that the nation's shadow inventory would rapidly rise have yet to materialize, as the shadow inventory continues to show signs of dropping, according to the latest report reflecting July data from CoreLogic.
The nation's shadow inventory fell 10.2 percent in July compared to a year ago.
Shadow inventory reflects the number of distressed homes that have not yet been listed on the multiple listing services but will likely reach the market soon. It does not, however, take into account the number of owners current on their mortgages who would sell if they could break even on a home sale.
"Broadly speaking, the shadow inventory continued to shrink in July," says Anand Nallathambi, president and CEO of CoreLogic. "The reduction is being driven by a variety of resolution approaches. This is yet another hopeful sign that the housing market is slowly healing."
As of July, 2.3 million properties were considered in residential shadow inventory, which represents a six-month supply. Of those properties, 1 million are from seriously delinquent loans; 900,000 are in some stage of foreclosure; and 345,000 are REOs, according to CoreLogic's report.