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Foreclosure rates spike in July but improvement continues

Foreclosure rates increased between June and July, but it's not a cause for concern.

The most recent U.S. Foreclosure Market Report shows foreclosure actions, including notices, scheduled auctions and bank repossessions, rose between June and July by 2 percent, RealtyTrac reported.

There were 109,434 actions reported in July and 49,624 were homes entering the foreclosure process for the first time, according to RealtyTrac. Of the actions reported, 51,595 were for schedule auctions and 25,937 properties were repossessed by lenders.

Worst states for foreclosures
Florida, Maryland, Nevada, Illinois and Ohio topped the list of states with the highest foreclosure rates in July. Florida had the highest foreclosure rate for the 10th month in a row, which was two and a half times more than the national average. Maryland has had the second-highest foreclosure rate for six consecutive months.

Nevada is in third for the highest number of foreclosures, though it was sixth in June. The foreclosure rate in Illinois has been decreasing for 20 months but the state remains in fourth place. Ohio's foreclosure rate has also been steadily decreasing but it has the fifth-highest number of foreclosures in the U.S.

Metro areas' foreclosure rates
Five of the nation's 20 metro areas went against the grain and saw higher foreclosure action rates on a year-over-year basis. The Houston metro area, Washington, D.C., the San Diego, Los Angeles and Riverside-San Bernardino, California, areas all saw rises in foreclosure activity in July compared to July 2013.

Situation still improving in the long run
However, even a small increase in foreclosure activities isn't enough to worry experts. July was the 46th straight month in which foreclosure activity was down compared to the same month a year before, according to Daren Blomquist, vice president of RealtyTrac. Foreclosure actions this July were down 16 percent from July 2013. In July 2013, the foreclosure actions were down 32 percent on a year-over-year basis.

"It is not uncommon to see month-to-month fluctuations that are not indicative of the long-term trend; that is most likely the case with July numbers," Blomquist told Reuters. "If we see a string of four to six months of monthly increases, that will certainly be cause for concern, but we're not there yet."

The 2 percent increase between June and July does not take away from the improvement in foreclosures. Blomquist points out the number of state and local housing markets with foreclosure problems is decreasing, Reuters reported. Foreclosures remain in an overall downward trend.