New Foreclosures Hit Record

Duncan said the recent turmoil in the global credit markets means the foreclosure rate could hit a new high over the next year.

Delinquency rates for mortgages stood at 5.12% of all loans outstanding in the second quarter, up 73 basis points from a year earlier. That was below the recent high delinquency rate of 6.1% that came at the end of the last recession in 2001, Duncan said.

Homebuilder stocks fell on the news, since it indicates that the number of homes on the market could swell. Pulte Homes (SPF Quote) was down 1.2%, to $16.17, while Standard Pacific(SPF Quote) slipped 4% to $9.45 and Ryland (RYL Quote) fell 2.4% to $27.13. Hovnanian(HOV Quote), which releases its quarterly results after the market closes on Thursday, was down 3.1% to $11.44.