Increase in Foreclosures Across the US
Foreclosure rates are climbing again in the United States, putting many homeowners in precarious situations.
According to recent data from Attom, a prominent real estate analytics firm, there were 35,697 properties with foreclosure filings in August, encompassing default notices, scheduled auctions, and bank foreclosures. This marks a slight 1% decrease from July but an 18% increase compared to last August.
Rob Barber, CEO of Attom, noted, “This marks the third consecutive month of rising foreclosure activity along with six months of year-over-year growth with double-digit annual increases.” Though these levels are still below pre-pandemic figures, the uptick suggests that some homeowners might be struggling with financial pressures amid a costly environment.
Foreclosure essentially allows lenders to reclaim properties when borrowers default on their mortgage payments. Once lenders regain control, they can sell the properties, often to recover owed balances.
Barber added, “The increase in foreclosures highlights growing affordability issues. Many households are finding it challenging to keep up with costs. While home prices have eased in some areas from pandemic highs, owners still find themselves in a tough situation where they can’t sell without incurring losses.”
The surge in foreclosures is occurring within a housing market that continues to face affordability challenges.
A report by Realtor.com shows that the national median home price in August was $429,990, a 2.2% dip from July, but unchanged from the previous year—something expected at this time of year. Prices per square foot have edged up by only 0.1%. Yet, when compared to pre-pandemic times, affordability is notably worse.
Since August 2019, typical list prices have skyrocketed by 36.1%, while prices per square foot have surged by 51.3%.
States with the Highest Foreclosure Rates
Attom reported that, nationally, one in every 3,987 housing units faced foreclosure filings in August. The states experiencing the highest rates were Nevada (one in 2,069), South Carolina (one in 2,152), and Florida (one in 2,512).
Homeowners in Florida are facing a unique blend of challenges. “In Florida, many face heightened adjustable-rate mortgage resets, doubled windstorm and flood insurance costs, and decreasing coverage post-hurricanes,” said Chad Cummings, a real estate and tax attorney. These pressures ripple into the housing market.
“Sellers may rush to list their properties or lower prices to avoid competition with foreclosures. Buyers often reconsider after realizing insurance costs inflate their monthly expenses,” he explained. Moreover, title insurance companies are noting an uptick in transfers of distressed assets, especially in urban centers like Orlando, Fort Lauderdale, Dallas, and San Antonio.
In cities with over a million residents, Cleveland leads in foreclosure rates, closely followed by Las Vegas (one in 1,817), Jacksonville, Florida (one in 2,057), Houston (one in 1,195), and Orlando (one in 2,210).
New Foreclosure Initiations on the Rise
The national rise in foreclosures primarily stems from new filings. In August, lenders initiated the process for 24,254 US properties, reflecting a tiny 0.2% decrease from July but nearly a 17% increase from the previous year.
Texas (2,982), Florida (2,803), California (2,558), New York (1,207), and Illinois (1,170) are the states with the most new foreclosure filings.
While experts express concern over the upward trend, many consider it a natural result of soaring housing costs, a cooling job market, and persistent inflation. Importantly, the current growth is emerging from historically low levels, and foreclosures remain significantly lower than pre-pandemic norms. However, if affordability issues persist, an acceleration in foreclosure activity is conceivable, but the current data doesn’t suggest we are heading toward a crisis reminiscent of 2008.
Cummings pointed out that the situation in Texas and Florida demonstrates how quickly households can exhaust their financial safety nets. “In the first half of 2025, Florida and Texas together saw 32,878 foreclosure starts, surpassing levels from 2022 and indicating financial instability,” he noted.
At the metro level, New York had 1,431 new foreclosures, followed by Houston (1,178), Chicago (1,009), Los Angeles (862), and Miami (748).
Finally, Cummings emphasizes the importance of timely legal consultations, especially as foreclosure risks escalate. “Too often, by the time clients seek help, options are dwindling. Timing is everything!”
