NEW YORK (Reuters) - The pending supply of homes set to hit the U.S. housing market jumped more than 10 percent to 2.1 million units in August from a year earlier, suggesting further downward pressure on prices, CoreLogic said in a report on Monday.
Based on that number, it would take eight months to work through the “shadow inventory,” compared with five months a year ago, the mortgage data firm said.
Shadow inventory is seen as one of the chief threats to the fragile housing market that is showing signs of retrenchment. If banks swiftly dump these homes on the market, economists fear it could renew a vicious cycle that could depress home prices to levels that cause more defaults and foreclosures.
Prolonged foreclosure processing times at the nation’s mortgage servicers are exacerbating shadow inventory, Mark Fleming, CoreLogic’s chief economist, said in a statement.
Reporting by Al Yoon; Editing by Padraic Cassidy