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.
“August marked the sixth consecutive month of year-over-year increases in U.S. foreclosure activity and the third straight month with double-digit annual growth,” said Rob Barber, CEO at ATTOM.
“While overall levels remain below those seen before the pandemic, the ongoing rise in both foreclosure starts and completions suggests that some homeowners may be experiencing added financial strain in the current high-cost and high-interest-rate environment.”
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®.
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 are highest in Nevada, South Carolina, and Florida
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.
Cummings said these challenges are filtering directly into the housing market.
“Sellers are accelerating listings or cutting prices to avoid competing with foreclosure inventory. Buyers are renegotiating or walking away after learning that insurance premiums push total monthly costs beyond underwriting limits,” he said. “Title insurers are flagging a growing number of distressed asset transfers, particularly in metro areas like Orlando, Fort Lauderdale, Dallas, and San Antonio.”
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).
Texas, Florida, and California drive 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).
“While the upward trend in foreclosures is concerning, it is not unexpected given the combination of high housing costs, a cooling job market, and persistent inflation pressures,” says Jones. “Importantly, this growth is emerging from historically low levels and foreclosures remain rare compared to pre-pandemic norms. Taken together, the risk of a gradual acceleration is real if current affordability pressures persist, but today’s data do not suggest broad-based, 2008-style stress.”
According to Cummings, the concentration of activity in Texas and Florida underscores how quickly financial cushions are being depleted.
“Florida and Texas posted a combined 32,878 foreclosure starts in the first half of 2025 … outpacing 2022 levels and approaching pre-pandemic numbers by far. This reflects both macroeconomic instability and the exhaustion of household liquidity buffers. Home equity lines, tax refunds, and pandemic savings have all been tapped,” he said.
At the metro level, ATTOM data showed New York led with 1,431 foreclosure starts, followed by Houston (1,178), Chicago (1,009), Los Angeles (862), and Miami (748).
“When foreclosure risk becomes probable, early consultation with counsel is critical,” says Cummings. “Unfortunately, by the time some clients get to my office, it is far too late, and our options have narrowed significantly. Timing is everything!”
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