The recent National Foreclosure Report from CoreLogic announced that the foreclosure inventory — that is, the number of homes in foreclosure — fell by 2.9%, dropping from 1.4 million homes in some stage of foreclosure during the month of April to 1.0 million homes in May. This inventory represented 2.6% of all mortgaged homes in the U.S., compared to 3.5% in May 2012. Year over year, foreclosures dropped by 27% from 71,000 in May of last year to 52,000 in May 2013.

CoreLogic tracks a third measure, the shadow inventory (also known as pending supply) by calculating the number of properties that are seriously delinquent, in foreclosure or held as real estate owned by mortgage servicers but not listed on Multiple Listing Services. At its best in 2010, the shadow inventory contained 3 million homes. This April’s shadow inventory, representing a supply of 5.3 months, was just shy of 2 million homes.

The value of shadow inventory also fell from a high of $386 billion in April 2012 to $314 billion in April 2013. On a year-to-year basis, the shadow inventory decreased 18%.

Anand Nallathambi, president and CEO of CoreLogic, said the drop in foreclosures and the shrinking foreclosure inventory indicate the economy and the housing market are improving, as more homeowners are beginning to stay current on their mortgage payments.