Here is a prominent headline featured on the front of the Chicago Tribune‘s web page early yesterday: “Illinois foreclosures surge nearly 18% in August.” Based on the headline, this sounds like bad news for the Illinois housing market. However, if you read into the story, the news isn’t all bad and perhaps some of it could even be interpreted as being good:
Illinois home foreclosure activity rose 17.6 percent in August compared to the previous month…
The filings represent one in every 424 housing units in the state. That rate is almost 26 percent lower than in August of last year and eighth-highest nationally.
RealtyTrac says the increase in many states likely is due to lenders resolving paperwork processing problems that had delayed many foreclosures. And it may signal more bank repossessions in coming months…
The number of U.S. homes that received an initial default notice — the first step in the foreclosure process — jumped 33 percent in August from July, foreclosure listing firm RealtyTrac Inc. said Thursday.
The increase represents a nine-month high and the biggest monthly gain in four years. The spike signals banks are starting to take swifter action against homeowners, nearly a year after processing issues led to a sharp slowdown in foreclosures.
There are a couple of trends going on here. First, foreclosures may be up nearly 18% from July 2011 to August 2011 and this sounds bad. But, compared to last August, the rate of foreclosures is down just over 25%. Isn’t this good news for Illinois homeowners?
The second trend is that it appears the rate of foreclosures might be picking up because lenders may now be moving more quickly against residents behind in their payments. This would be bad for these residents but might also be good as it means that foreclosures might be more quickly removed from the market rather than dragging out the process and having a longer negative effect on nearby housing prices.
I know headline space is limited understanding the nuances about this particular foreclosure statistic seems quite important. The news about a “surge nearly 18%” will catch people’s attention but there has to be a better way in the headline to reflect what is behind this number.
0 thoughts on “Misleading Chicago Tribune headline about Illinois foreclosures being up 18% in August?”
I wouldn’t say the headline was misleading. Based on our stats the actual increase was 18.22% (Cook Co was 16.44%). The suburban area increase was 21.25%.
Another reason for this August peak is due to the vacation time most of the attorneys take.
So I’d say that the actual increase is below 10%.
My primary thought on asking whether it was misleading was to put the number in some context. First, we had a number of stories of a rise in foreclosures across the country in the last few weeks, typically taken as a sign that banks are moving more quickly. Second, if we compared these figures to foreclosures in August a year ago, the current figure looks good.
I think the 18% rise in the headline is primarily intended to grab your attention, not necessarily tell the more nuanced story about what that figure means.