Foreclosure activity in Massachusetts continued to wind down last month. Lenders filed only 248 petitions to take back properties, the lowest monthly number since at least 2006, according to data released Thursday by a Boston real estate tracking firm.
The May foreclosure starts represented an 86 percent drop compared with the same month in 2012, and the first time since the state’s housing meltdown started seven years ago that the number of foreclosures initiated fell below 250, Warren Group reported.
Foreclosure deeds, which mark the last step in the foreclosure process, also fell in May, to 251. That represented a 68 percent drop compared with the same time last year, according to Warren Group. Since January, 1,246 homeowners have lost their properties to foreclosure, almost 69 percent fewer than during the first five months of 2012.
The decline in foreclosures comes as Massachusetts housing prices are rising. In May, the median for a single-family home hit $315,250, or 7.7 percent more than during that month last year, according to a report released this week by RE/MAX of New England. The number of “underwater” homeowners — those whose mortgages are larger than the value of their properties — is also dropping.
“This month’s data further supports our argument that the foreclosure crisis is behind us,’’ said Timothy M. Warren Jr., chief executive of Warren Group. “The combination of a recovering housing market and banks’ willingness to allow for loan modifications has helped suppress foreclosure levels.”
But other housing industry observers worry that changes in state and federal laws also are playing a part in the foreclosure slowdown — creating an artificial lull before foreclosures pick up again later this year.
Among the changes are regulations implemented as part of a multistate settlement between attorneys general and major lenders and a 2012 state law that requires banks to notify homeowners of their right to seek a loan modification before losing a property.
“The industry is still digesting a lot of new requirements,’’ said Jon Skarin, senior vice president at the Massachusetts Bankers Association. As lenders get up to speed with the new rules, Skarin said, he expects foreclosures “to start ticking up a bit.”
“There [are] still cases where people won’t be able to be helped,” Skarin said.
Barbara Anthony, undersecretary of the state Office of Consumer Affairs and Business Regulation, said officials will issue regulations related to the 2012 foreclosure law Friday. But Anthony said she doubts lenders have pulled back on foreclosures because they lack clarity about the law’s details.
Instead, she attributes the dramatic drop to an improving economy and the positive effects of changes in state law regarding foreclosures.
“Unemployment is dropping, jobs are increasing,’’ Anthony said. “We are in a recovery.”