One of the biggest problems for the housing market in the last several years has been that millions of Americans have slipped into dire financial straits – often through no fault of their own – and struggled to stay current on their mortgage payments. As a result, many have dealt with foreclosure since the recession began, but the number of those who are doing so currently continued to slide in July.

Overall, the number of completed foreclosure filings across the country through the end of July was just 45,000, down 21.2 percent on an annual basis from the 57,000 observed in the same month last year, according to the latest monthly National Foreclosure Report from the housing market data firm CoreLogic. Moreover, that number also represented an 8.5 percent drop from the 49,000 seen in June.

Still, though, the number remains uncommonly high, the report said. While some 5.1 million people have dealt with completed foreclosures since the economic downturn began in earnest in late 2008, the number of such filings completed every month prior to that downturn (from 2000 to 2006) averaged just 21,000, indicating just how far the market still has to go.

Inventory dropping too
Of course, with the declines in filings and improving economy overall, the number of homes on the market that are in the foreclosure process continues to dwindle, the report said. Through the end of July, there were about 640,000 such homes in the foreclosure process, and that was down 34.4 percent from the 976,000 seen a year earlier. Consequently, the share of homes in the market taken up by such properties now stands at just 1.6 percent, a decline from 2.4 percent in July 2013.

"Based on current trends, the overall foreclosure inventory could trend down to as low as 500,000 homes by year-end which is very positive news for the housing market," said Anand Nallathambi, president and CEO of CoreLogic. "The picture is considerably brighter in the non-judicial states which maintain consistently lower foreclosure stocks and, in general, lower levels of serious delinquency. In total, there are now 36 states with an inventory of foreclosed homes lower than the national rate of 1.7 percent."

This may be very good news for the market overall, as fewer foreclosures could bring more availability to buyers in the market, as well as give current owners the flexibility to start shopping around for properties they might not have been able to seek just a few months ago.