ROBERT SIEGEL, HOST:
The housing market may well play a role in tonight's debate and we got word today that foreclosure activity declined to a five-year low in September. The website RealtyTrac says the national average for the number of default notices, auctions and repossessions declined 7 percent month over month. Still, as NPR's Yuki Noguchi reports, that does not mean the entire country is seeing declines.
YUKI NOGUCHI, BYLINE: The operative word here is average. The national average on foreclosure activity has fallen to rates last seen before the great recession. But that decline was driven by certain states, including California, Michigan and Arizona, where foreclosure activity declined by double-digits. Meanwhile, activity was dramatically up in some states, including Florida, Illinois, New York and New Jersey.
Daren Blomquist is vice president at RealtyTrac.
DAREN BLOMQUIST: At a 50,000-foot level we're past the worst of this foreclosure crisis. Lower down into the weeds, there's definitely still some concerns and markets that are susceptible to further price erosion even, because of these more foreclosures coming online, and that are going to take longer to move their way toward recovery because these foreclosures are lingering.
NOGUCHI: Foreclosures were up 130 percent over last year in New Jersey and up 53 percent in New York. So why the huge difference? States that require court approvals to foreclose are backlogged. In New York, it takes nearly three years to foreclose. While in Texas, which does not require a judge to sign off on the process, it takes three months.
Blomquist says that can be a plus, especially in places like Florida.
BLOMQUIST: By kind of holding back the foreclosures there, it's allowed many of the Florida markets to stabilize. And we're seeing home prices increase in those markets.
NOGUCHI: But not everyone is so sure that the slower pace of foreclosures is good news. Sean O'Toole is CEO of ForeclosureRadar.com, which tracks the housing markets in Western states. His company released a similar report yesterday showing dramatic declines in default rates. But he says in many states it's also taking longer for banks to foreclose and that's not a good sign.
SEAN O'TOOLE: There's no question that we're better off than we were a year ago. Delinquencies are down and foreclosures are down. But I also think that it indicates that we still don't have a normally functioning market.
NOGUCHI: O'Toole says he expected the banks to process for closures more quickly after settling a case over botched paperwork earlier this year. But he argues until that process returns to normal, the housing market will simply be prolonging its pain.
Yuki Noguchi, NPR News, Washington. Transcript provided by NPR, Copyright National Public Radio.