Foreclosures Hitting Pricier Markets Harder

Foreclosures have worked their way through modest neighborhoods and are now hitting higher-priced markets.

Data from Zillow.com suggests that foreclosure rates are rising for homes in the top-third of housing values, while the bottom-third of housing now accounts for 35 percent of foreclosures, down from 55 percent in 2006.

The rising number of foreclosures among more expensive homes mirrors the increase in foreclosures among prime borrowers. More than 58 percent of foreclosure starts in the second quarter were prime loans, up from 44 percent in 2008, according to the Mortgage Bankers Association.

Subprime mortgages accounted for one-third of foreclosures, down from half the previous year.Foreclosures are unlikely to level out until late in 2010, says Stan Humphries, chief economist for Zillow.

Source: The Wall Street Journal, Nick Timiraos (10/12/2009)