Foreclosures Rise as US Housing Market Shows Strain, Nevada Leads in Distress

Foreclosure filings in August 2025 rose nationwide, underscoring ongoing stress in the U.S. housing market. ATTOM reported a total of 35,697 properties with foreclosure filings across the United States, a 1% decrease from July but an 18% year-over-year increase. It marked the sixth straight month of rising filings compared with the prior year and the third consecutive month with double-digit annual growth, signaling a persistent tilt toward borrower distress even as overall rates cool slightly.

Nevada posted the worst foreclosure rate among states, with one filing for every 2,069 housing units. Nationwide, one in every 3,987 housing units had a foreclosure filing in August 2025. The states with the strongest foreclosure pressures were Nevada (one in 2,069), South Carolina (one in 2,152), and Florida (one in 2,512). Among large metros, Cleveland, Las Vegas, Jacksonville, Houston and Orlando recorded the highest foreclosure rates for populations above 1 million.

The data come as the Federal Reserve cut interest rates for the first time since December 2024, though policy rates remain elevated in a range of 4% to 4.25%. That backdrop of higher borrowing costs helps explain why more homeowners are slipping into foreclosure or facing starts that may convert to completed filings in the months ahead.

For context, Las Vegas has become a focal point of housing-market weakness in the United States, with rising foreclosures alongside dwindling tourist demand and a growing supply of distressed homes. In Florida, foreclosures have added to a broader set of challenges facing homeowners, including a condo market strain and sharply rising insurance costs after Hurricane Milton in October 2024. Redfin economist Chen Zhao characterized South Florida as the “epicenter of housing market weakness” in the country, reflecting a confluence of higher costs, tighter financing and asset-price pressure in the state’s coastal markets. Lakeland, situated between Tampa and Orlando, registered the worst foreclosure rate among metros with populations of at least 200,000, at one filing per 1,212 housing units.

Foreclosures carry consequences beyond the loss of a home. Homeowners often see damaged credit scores, increased difficulty in renting or obtaining new mortgages, and higher stress during an already challenging period of high mortgage rates and rising living costs. Rob Barber, CEO of ATTOM, said the pattern of rising starts and completions may reflect broader economic strains, including employment and wage trends, as well as interest-rate dynamics. He cautioned that persistent foreclosure activity can signal trouble for the housing and financial systems and potentially ripple through local economies, property values and neighborhood stability.

Investors often view elevated foreclosure activity as an opportunity to acquire distressed properties at discounted prices. Barber noted that large institutional buyers may step in during periods of higher foreclosure activity, reshaping demand dynamics in certain markets.

The latest readings come at a time when housing affordability remains stretched in many parts of the country, with government policy and credit conditions continuing to influence both the pace of foreclosures and the ability of homeowners to stay in their homes. While the rate of new filings softened modestly from July, the year-over-year acceleration points to a market that remains out of balance for many borrowers, especially in states with higher home prices and correspondingly higher mortgage payments. Experts say the key will be whether job growth and wage gains can keep pace with ongoing rate costs, or if further rate adjustments by the Fed will be needed to stabilize housing demand and borrower relief.