Utah fifth-worst in the country in home foreclosures

Utah continues to be stung by the foreclosure bug, ranking fifth in the latest nationwide figures released by RealtyTrac.

The report released Thursday showed Utah behind only Nevada, Arizona, California and Florida in the rate of foreclosure filings per household.

The RealtyTrac U.S. Foreclosure Market Report for the first quarter of 2010 indicated that one in every 88 Utah households had a foreclosure filing. That was well above the national average of one in every 138 housing units and an increase of 21 percent from the prior three-month period.

Utah foreclosure activity increased 75 percent from the first quarter of 2009, the highest annual increase among states with top-10 foreclosure rates. The Beehive State also ranked fifth for the all of 2009, according to the real estate market research firm based in Irvine, Calif.

RealtyTrac publishes a national database of foreclosure and bank-owned properties from approximately 2,500 counties across the nation.

One local analyst believes there are at least two reasons why foreclosures are so in Utah high right now.

"The rate of job losses in Utah last year was actually greater than the U.S. as a whole," Kendall Oliphant, senior vice president at Thredgold Economic Associates, told the Deseret News in an e-mail. "At its lowest point in August 2009, total Utah employment was down 5.9 percent from 12 months earlier, versus 5.0 percent for the U.S."

The main reason Utah's unemployment rate is considerably lower than the U.S. is that Utah entered this recession with a considerably lower unemployment rate, he added.

"So Utah households are experiencing greater-than-average financial stress from lost income. Foreclosure activity tends to lag behind the loss of a job by several months (probably in the neighborhood of 6-12 months)," Oliphant said.

He also said demographics play a large part. Because Utah households tend to be larger and charitable donations tend to be higher, both contribute to added financial burden.

"This extra financial strain isn't typically considered when determining how much of a mortgage a borrower qualifies for," he said. "So many Utah families end up borrowing the full amount that they 'qualify' for, even though they probably can't afford it."

Oliphant noted that as Utah's job and income situation improves in the coming months, foreclosure activity should begin to taper off.

Nationally, Nevada continued to document the nation's highest state foreclosure rate in the first quarter of 2010, with one in every 33 housing units receiving a foreclosure filing during the quarter. That is more than four times the national average and an increase of nearly 15 percent from the previous quarter. Still, Nevada's total number of properties receiving a foreclosure filing during the quarter was down 16 percent from the same period last year.

For the third straight quarter, Arizona had the second-highest foreclosure rate, with one in every 49 properties recording a filing.

Florida was third with one in every 57 units receiving a foreclosure filing during the quarter.

California foreclosure activity decreased 6 percent from the first quarter of 2009, but the state still recorded the nation's fourth-highest foreclosure rate — one in every 62 housing units receiving a filing.

e-mail: jlee@desnews.com