Introduction to Foreclosures
Foreclosures are once again creeping higher across the country, with thousands of homeowners facing the legal process of losing their homes. In August, there were a total of 35,697 U.S. properties with foreclosure filings — default notices, scheduled auctions, or bank repossessions — according to ATTOM, a leading curator of land, property data, and real estate analytics. That figure was down 1% from July but up 18% compared with August of last year.
Understanding Foreclosure
Foreclosure, at its core, is the legal mechanism by which a lender repossesses a property after a borrower defaults on their mortgage payments. Once the lender—often a bank — regains control, the property can be sold to recoup unpaid loan balances. “The recent rise in foreclosure activity underscores mounting affordability pressures, as more households struggle to stay afloat. Home prices have eased from pandemic-era highs in several markets, leaving some owners in a precarious position, unable to sustain housing costs yet unable to sell without incurring losses,” says Hannah Jones, senior economic research analyst at Realtor.com®.
Current Housing Market Trends
The rise in foreclosures is playing out against a housing backdrop where affordability remains strained. According to the Realtor.com August 2025 Monthly Housing Trends Report, the national median list price was $429,990, unchanged from last year but down 2.2% from July, which is typical for late summer. The price per square foot also remained steady, increasing by just 0.1%. But compared with pre-pandemic levels, affordability has deteriorated significantly. Since August 2019, the typical list price has climbed 36.1%, while the price per square foot is up 51.3%.
Foreclosure Rates by State
Highest Foreclosure Rates
Nationwide, 1 in every 3,987 housing units had a foreclosure filing in August, ATTOM reported. The states with the highest foreclosure rates were Nevada (1 in every 2,069 housing units), South Carolina (1 in every 2,152), and Florida (1 in every 2,512). In Florida, several overlapping pressures are weighing on homeowners. “Florida homeowners are confronting a unique trifecta: adjustable-rate mortgages resetting sharply higher, windstorm and flood insurance premiums doubling in many counties, and widespread underinsurance post-hurricane,” Chad D. Cummings, a real estate and tax attorney, told Realtor.com.
Metro Areas with High Foreclosure Rates
At the metro level, ATTOM reported that some of the markets hit hardest included Lakeland, FL (1 in every 1,212 housing units with a foreclosure filing), Columbia, SC (1 in every 1,347), Chico, CA (1 in every 1,545), Cleveland (1 in every 1,755), and Ocala, FL (1 in every 1,816). Among large metros with over 1 million residents, Cleveland topped the list, followed by Las Vegas (1 in every 1,817), Jacksonville, FL (1 in every 2,057), Houston (1 in every 2,195), and Orlando, FL (1 in every 2,210).
Drivers of Foreclosure Starts
Much of the national increase in foreclosure activity is being driven by new filings. Lenders started the foreclosure process on 24,254 U.S. properties in August, down just 0.2% from July but up nearly 17% from last year, according to ATTOM. The states with the highest number of foreclosure starts were Texas (2,982), Florida (2,803), California (2,558), New York (1,207), and Illinois (1,170).
Conclusion
The rise in foreclosures underscores the challenges many homeowners are facing in the current economic environment. High housing costs, a cooling job market, and persistent inflation pressures are contributing to the increase in foreclosure activity. While the situation is concerning, it is not unexpected given the combination of these factors. It is crucial for homeowners to be aware of their financial situation and seek help early if they are struggling to make mortgage payments.
FAQs
- What is foreclosure?
Foreclosure is the legal process by which a lender repossesses a property after a borrower defaults on their mortgage payments. - Why are foreclosures rising?
Foreclosures are rising due to a combination of high housing costs, a cooling job market, and persistent inflation pressures, making it difficult for some homeowners to sustain their mortgage payments. - Which states have the highest foreclosure rates?
The states with the highest foreclosure rates are Nevada, South Carolina, and Florida. - What can homeowners do if they are struggling to make mortgage payments?
Homeowners who are struggling to make mortgage payments should seek help early, including consulting with a financial advisor or an attorney specializing in real estate law. - Is the current rise in foreclosures similar to the 2008 financial crisis?
No, according to experts, the current rise in foreclosures, while concerning, does not suggest broad-based, 2008-style stress, as it is emerging from historically low levels and foreclosures remain rare compared to pre-pandemic norms.
