NEW YORK (CNNMoney.com) -- First, the good news: Foreclosure filings dropped nearly 10% between December and January.
That's a total of 315,716 notices compared to 349,519 in December, according to RealtyTrac, which issues a monthly report on foreclosure activity.
Now, the bad news: Filings rose 15% compared to a year ago, and the number of people who actually had their homes repossessed jumped 31% to 87,648.
That year-over-year increase in bank repossessions is what Rick Sharga, a spokesman for RealtyTrac, finds most troubling. "A lot of properties that had been stalled in foreclosure are now going all the way through to auction," he said.
The repossession numbers for January indicate to Sharga that the nation will probably set a new record for homes lost this year. All that needs to happen is for repossession numbers to stay flat the rest of the year.
And the drop in filings might -- or might not -- be actual good news. The numbers followed a familiar theme: December foreclosure statistics tend to spike as households cope with increased spending preceding the holidays and end of year financial pressures.
"January foreclosure numbers are exhibiting a pattern very similar to a year ago," said James Saccacio, RealtyTrac's CEO. "If history repeats itself, we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan-modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works."
Most industry observers also expect home prices to decline further this year before they stabilize. That will push more homeowners underwater -- meaning they owe more on their mortgages than their homes are worth -- making them less likely or able to pay off their mortgage loans.
Sharga does not think the problem is going away anytime soon. "We've settled into a plateau," he said, "with 11 straight months of 300,000-plus filings. I don't see that changing the rest of the year."
Foreclosure filings dropped 18% year-over-year in Nevada, but it still remained the nation's leading foreclosure state with one household in every 95 receiving at least one filing during the month.
Arizona was the second-worst performer, with a rate of one household for every 129 receiving a filing. Florida and California followed with one in every 187 households.
California, by far the nation's most populated state, had the highest volume of filings, with 71,817. Florida was second, with 47,069.
The least affected state was South Dakota, which had a total of only 14 foreclosure filings during the month, one household in nearly 26,000. Vermont also maintained a nearly pristine record with just one household in every 20,841 getting hit.
The hardest hit metropolitan area in January was Las Vegas, with a rate of one for every 82 households. Phoenix was next, with one in every 102.
The next six hardest-hit metro areas all are located in California, led by number three Modesto and Stockton, both with one in every 107. Two Florida places made the top 10 list: Cape Coral-Ft. Myers (one in 121) and Orlando (one in 143).
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