U.S. Home Foreclosures Rise 18% Year Over Year as Affordability Strains Grow

Foreclosure activity across the United States rose 18% in August from a year earlier, with 35,697 properties recording foreclosure filings — including default notices, scheduled auctions or bank repossessions — according to ATTOM, a leading property data firm. The August total was down 1% from July but marked the sixth consecutive month of year‑over‑year increases.

Lenders initiated the foreclosure process on 24,254 U.S. properties in August, a figure that was effectively flat with July but nearly 17% higher than the same month last year, ATTOM said. "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 ATTOM Chief Executive Rob Barber. He added that while foreclosure levels remain below those seen before the pandemic, rising starts and completions suggest some homeowners are experiencing added financial strain amid high costs and elevated interest rates.

The national picture is uneven. Nationwide, one in every 3,987 housing units had a foreclosure filing in August. The highest state foreclosure rates were Nevada (one in every 2,069 housing units), South Carolina (one in every 2,152) and Florida (one in every 2,512). ATTOM identified hard‑hit metropolitan markets including Lakeland, Florida; Columbia, South Carolina; Chico, California; Cleveland; and Ocala, Florida. Among large metros with more than 1 million residents, Cleveland topped the list, followed by Las Vegas, Jacksonville, Houston and Orlando.

Much of the year‑over‑year increase has been driven by new foreclosure starts concentrated in a handful of states. Texas, Florida and California recorded the highest number of foreclosure starts in August, with Texas at 2,982, Florida at 2,803 and California at 2,558. New York and Illinois also ranked among the top five states for starts. At the metro level, New York City led in foreclosure starts, followed by Houston, Chicago, Los Angeles and Miami.

Housing affordability pressures are complicating the market for both borrowers and sellers. Realtor.com reported that the national median list price in August was $429,990, unchanged from a year earlier and down 2.2% from July, while price per square foot rose just 0.1%. However, compared with the pre‑pandemic period of August 2019, the typical list price has climbed 36.1% and price per square foot has risen 51.3%, measures that underscore longer‑term affordability erosion.

In Florida, homeowners face a particular set of overlapping headwinds that are pushing some toward foreclosure. Real estate and tax attorney Chad D. Cummings said adjustable‑rate mortgage resets, sharply higher windstorm and flood insurance premiums and widespread underinsurance after recent hurricanes are amplifying strain. "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," Cummings said. He added that title insurers are flagging more distressed asset transfers in metros including Orlando, Fort Lauderdale, Dallas and San Antonio.

Industry analysts cautioned that the recent uptick is emerging from historically low foreclosure levels and does not resemble the widespread, systemic distress seen in 2008. Hannah Jones, senior economic research analyst at Realtor.com, said the rise is concerning but not unexpected amid elevated housing costs, a cooling labor market and persistent inflation. "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," she said.

ATTOM data show that both foreclosure starts and completions are climbing, a pattern that signals some households have exhausted financial cushions built during earlier phases of the economic cycle. Cummings noted that home equity lines, tax refunds and pandemic savings that helped many borrowers stay current have largely been tapped. "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," he said.

Despite the increase, foreclosures remain a small share of overall housing stock. Policymakers, lenders and consumer advocates continue to monitor the situation for signs of a broader deterioration in household finances. Legal experts urge homeowners facing difficulty to seek counsel early. "When foreclosure risk becomes probable, early consultation with counsel is critical," Cummings said. "Unfortunately, by the time some clients get to my office, it is far too late, and our options have narrowed significantly. Timing is everything."