The number of U.S. homes repossessed by lenders last month fell 11% from January and declined 29% from February last year, falling to the lowest mark since September 2007, according to foreclosure listing firm RealtyTrac Inc.
An estimated 45,038 U.S. homes completed the foreclosure process in February, less than half of the 102,000 homes lost to foreclosure in March 2010, when repossessions peaked, according to the RealtyTrac's records, which date to January 2005.
Foreclosures remain at more than twice the pace RealtyTrac considers normal but the national impact has eased, said Daren Blomquist, a vice president at RealtyTrac.
"It's definitely safe to say we're past the worst of it at a national level," he said.
Higher home values help restore equity to homeowners, which can help those at risk of foreclosure by improving their chances of refinancing their mortgage to a lower payment or place them in a better position to sell their home. In the first nine months last year, 1.4 million homeowners who had been underwater on their mortgage, or owed more than their home is worth, were moved into positive equity, according to data from CoreLogic.
The tight supply of available homes for sale has created a sellers' market, with many properties drawing multiple offers. That means even bank-owned homes and those in some stage of foreclosure, which often sell at a discount to other homes, are going for higher prices.
Last year, sales of homes in some stage of foreclosure rose 6% from a year earlier, while sales of bank-owned homes fell 15%, according to RealtyTrac.
Some states continued to see sharp increases in homes lost to foreclosure last month - including Washington, Wisconsin and Iowa. But home repossessions declined both on an annual and monthly basis in most states, including California, Georgia and Arizona.
Given the monthly pace of home repossessions so far this year, Blomquist projects there will be 600,000 completed foreclosures this year, down from 671,000 last year.
Overall, Florida posted the nation's highest foreclosure rate, which RealtyTrac measures by tracking the number of properties with foreclosure-related filings. One in every 282 households in the state received at least one filing, or more than three times the national average.