Foreclosures Still 'Astronomically High'

Sales of homes in some stage of foreclosure declined year-over-year in the first quarter, but they still accounted for 28% of all home sales—a share nearly six times higher than what it would be in a healthy housing market. As a slice of all home purchases, foreclosure sales peaked two years ago at 37.4%. In the first quarter, they rose from 27% in the prior quarter, but fell from 29% a year earlier, according to RealtyTrac.

"It's an astronomically high number," said a senior vice president. "In a normal market, you're looking at the percentage of homes sold in foreclosure to be below 5%." The properties, often in need of repair, typically sell at a discount, weakening prices for other types of homes. (More foreclosures stories.)