The U.S. housing market is showing clear signs of strain, with foreclosure filings increasing year-over-year for the ninth consecutive month, signaling a troubling shift for many homeowners and a potential inflection point for the real estate sector. This persistent rise in foreclosure activity, as reported by ATTOM, suggests that the economic pressures faced by a growing number of households are translating into tangible distress.

It’s hard not to feel a sense of unease when you see the numbers, and this latest report from ATTOM paints a picture that’s hard to ignore. For the ninth month straight, we’re seeing more homes going into some stage of the foreclosure process compared to the same time last year. This isn't just a blip; it's a trend. In November 2025, a total of 35,651 U.S. properties had foreclosure filings.

While this is a slight dip from October, it's a significant 21 percent jump from November of the previous year. When I look at this data, I see more than just numbers; I see families facing difficult decisions and a market that’s clearly under pressure.

Housing Market Distress Mounts as Foreclosure Activity Rises for Ninth Month in a Row

Why the Climb? Unpacking the Foreclosure Trend

As Rob Barber, CEO at ATTOM, points out, “Foreclosure starts were up 17 percent from last year and completed foreclosures rose 26 percent.” This indicates that more homeowners are falling behind on their payments and lenders are taking action. While these numbers are still lower than what we saw during the Great Recession, the consistent upward movement is a clear signal that the market is “normalizing,” as Barber puts it. But let’s be honest, for those directly affected, it feels more like a significant struggle against higher housing costs and shifting economic pressures.

From my perspective, several factors are likely contributing to this escalating trend:

• Elevated Interest Rates: Many homeowners who bought or refinanced when interest rates were at historic lows are now facing much higher payments if they need to move or if their adjustable-rate mortgages reset. This can put a severe strain on household budgets.
• Inflationary Pressures: The cost of everyday goods and services remains high, squeezing disposable income. When there's less money left after covering essential expenses, mortgage payments can become harder to manage.
• Job Market Uncertainty: While the job market has shown resilience, there are pockets of instability. Layoffs and reduced hours can quickly lead to homeowners being unable to meet their financial obligations.
• Stagnant or Declining Home Equity in Some Areas: In some regions, home price appreciation has slowed or even reversed. This can leave homeowners with little to no equity to tap into if they need cash, making it harder to stave off foreclosure.

Where is the Distress Most Pronounced?

The ATTOM report highlights specific states and metropolitan areas that are seeing the brunt of this foreclosure surge. It's important to look at these areas to understand the localized impacts.

States with the Worst Foreclosure Rates (November 2025):

Nationwide, one in every 3,992 housing units had a foreclosure filing. Seeing states like Delaware and South Carolina with rates more than double the national average is a serious concern. These aren't just statistics; they represent communities where people are struggling.

Among larger cities (metro areas with over 1 million people), Philadelphia, PA, recorded the highest foreclosure rate, with one filing for every 1,511 housing units. ATTOM notes this was partly due to a temporary spike from resumed data collection, which is expected to correct itself. However, other major metros also show significant distress:

• Las Vegas, NV: 1 filing for every 2,013 housing units
• Cleveland, OH: 1 filing for every 2,114 housing units
• Orlando, FL: 1 filing for every 2,282 housing units
• Tampa, FL: 1 filing for every 2,362 housing units

It’s interesting to note that even in these troubled areas, the overall volume of foreclosures remains historically lower than peak crisis times. This offers a sliver of hope, suggesting that perhaps more homeowners have built up equity or have better financial cushions than in the past.

Foreclosure Starts vs. Completed Foreclosures: What's the Difference?

It's crucial to understand the different stages of foreclosure.

1. Foreclosure Starts: This is when lenders initiate the formal process, often with a notice of default or lis pendens. In November 2025, lenders started the foreclosure process on 23,720 U.S. properties. This is a 17 percent increase year-over-year.
2. Completed Foreclosures (REOs – Real Estate Owned): This is when the lender repossesses the home. There were 3,884 completed foreclosures in November 2025, an increase of 26 percent from the previous year.

The fact that both starts and completions are rising indicates that the issue is widespread and moving through the pipeline at an accelerated pace.

States Leading in Foreclosure Starts (November 2025):

1. Florida (2,819)
2. Texas (2,612)
3. California (2,090)
4. New York (1,146)
5. Illinois (1,075)

Interestingly, some major metropolitan areas, which typically see high numbers, actually experienced decreases in foreclosure starts compared to last year. For example, Boston, Miami, and Sacramento showed declines. This could suggest localized economic recovery in those specific urban centers, or perhaps more effective loss mitigation strategies being implemented there.

Looking Ahead: What Does This Mean for the Housing Market?

The steady rise in foreclosure activity is a strong indicator that the housing market is facing significant headwinds. As an observer of the real estate world, I see this as a natural, albeit painful, correction after years of rapid price growth and low interest rates.

• Potential Increase in Available Inventory: As more homes enter the foreclosure process and are eventually repossessed, the supply of homes for sale could increase. This might help to stabilize or even slightly decrease home prices in some areas, which could be a welcome development for potential buyers struggling with affordability.
• Impact on Home Prices: A sustained increase in supply, particularly of distressed properties, could put downward pressure on home prices. However, the extent of this impact will vary greatly by region, depending on local demand, economic conditions, and the sheer volume of foreclosures.
• Opportunities for Investors: For those with the capital and expertise, rising foreclosures can present opportunities to acquire properties at a discount. However, this market requires careful due diligence and a solid understanding of the risks involved.
• Challenge for Homeowners: For homeowners facing foreclosure, this is a deeply stressful time. It underscores the importance of proactive financial planning and seeking help from housing counselors or legal aid if needed.

While the situation is concerning, it’s important to remember that we are not in a widespread housing crisis on the scale of 2008. The market has more equity, and lending standards are generally tighter. However, the ongoing rise in foreclosure activity is a clear warning sign that we need to pay close attention to the economic well-being of homeowners and the stability of the housing market.

If you're paying attention to the housing market, you know that things can change quickly. While many areas are seeing steady growth, some homeowners are facing tougher times. In September 2025, Florida emerged as the state with the highest foreclosure rate, followed closely by Delaware and Nevada. This means that, unfortunately, more families in these areas are facing the difficult prospect of losing their homes. It's a serious issue, and understanding why it's happening is key to navigating these challenges.

As someone who's been watching the real estate world for a while, I've seen cycles come and go. This data from ATTOM, a leading real estate data firm, gives us a snapshot of where the pressure points are right now. It's not just about the numbers themselves, but what they tell us about the underlying economic health of these regions and the lives of the people living there.

5 States Facing the Highest Foreclosure Rates in 2025

The Foreclosure Picture in September 2025

Let's break down what's happening nationally first. In September 2025, there were 35,602 properties that experienced a foreclosure filing. This includes everything from initial default notices to scheduled auctions and properties that lenders took back. While this number was a tiny bit lower than in August (down 0.3%), it's a significant 20% jump compared to September of the previous year. This year-over-year increase is what really tells the story – it shows a trend of building pressure, not a fleeting blip. On a national level, this means one in every 3,997 housing units had a foreclosure filing.

Digging deeper, we see that new foreclosure starts were down 2% from August to 23,761. However, these starts are still up a notable 20% from last year. On the other hand, completed foreclosures – known as REOs (Real Estate Owned), where lenders officially repossess the property – saw a month-over-month dip of 7%. But just like with starts, they are up significantly, 44%, from this time last year. This tells me that while some new cases might be slowing down a bit, the backlog of properties entering the system and those already in it are still creating a challenging environment.

Why Are These States Struggling?

The top five states with the most foreclosure activity in September 2025 were Florida, Delaware, Nevada, Indiana, and South Carolina. What's interesting here is that these states are geographically diverse. This isn't just a problem in one corner of the country; it's a sign of broader issues affecting homeowners across different economic landscapes.

While the official data doesn't always spell out the exact reasons for each state, I can tell you from experience that a few common factors usually contribute to higher foreclosure rates:

• Affordability Pressures: When housing costs, property taxes, or insurance premiums rise faster than incomes, people can find themselves in a bind.
• Job Market Fluctuations: Economic downturns or industry-specific challenges in certain areas can lead to job losses, making it hard for people to keep up with mortgage payments.
• Interest Rate Hikes: For homeowners with adjustable-rate mortgages or those looking to refinance, rising interest rates can significantly increase monthly payments.
• Lingering Effects of Economic Shocks: Sometimes, the impact of past economic events, like a pandemic or regional recession, can surface later as people exhaust their reserves.
• Local Market Dynamics: Specific local issues, like a major employer leaving town or a surge in foreclosures from a previous period creating a supply glut, can affect a state's rates.

A Closer Look at the Top 5

Let's spotlight the states that are currently facing the most significant foreclosure challenges, based on ATTOM's September 2025 data.

1. Florida: The Sunshine State Sees Storm Clouds

Florida takes the top spot with a foreclosure rate of 1 in every 2,182 housing units. This translates to 4,621 foreclosure filings out of over 10 million housing units. It’s a stark contrast to the typical image of a thriving tourist destination.

• Key Counties Affected: Hardee, Highlands, and Osceola counties are showing particularly high rates based on the broader report from ATTOM.
• My Take: Florida has always been a dynamic market, prone to rapid growth and sometimes, rapid corrections. I suspect a combination of rapidly appreciating home values outpacing wage growth, coupled with potential issues related to high insurance costs and perhaps some speculative buying from previous years, could be contributing factors. The sheer volume of filings here is concerning.

2. Delaware: A Small State, Big Challenges

In Delaware, the foreclosure rate is 1 in every 2,325 housing units. While the number of filings (197) is much lower than Florida, relative to its smaller housing stock, it's a serious concern.

• Key Counties Affected: Kent, New Castle, and Sussex are the areas with the highest concentration according to the report.
• My Take: Delaware is often overlooked, but it has its own economic drivers. It's possible that specific local industries are facing headwinds, or perhaps a significant portion of its homeowners are on fixed incomes or have adjustable-rate mortgages that are now feeling the pinch of interest rate changes.

3. Nevada: The Silver State's Shiny Surface Tarnishes

Nevada ranks third, with a foreclosure rate of 1 in every 2,417 housing units. This means 541 filings in a state with just over 1.3 million housing units.

• Key Counties Affected: Lyon, Clark (which includes Las Vegas), and Churchill counties are seeing the most activity as per ATTOM's findings.
• My Take: Nevada's economy has historically been tied to tourism and development, which can be quite volatile. If there's been a slowdown in those sectors or if a lot of people bought homes during a boom period with the expectation of continued growth, they could now be struggling to keep up with payments, especially if property taxes or home maintenance costs have surged.

4. Indiana: The Crossroads of America Faces Economic Crossroads

Indiana finds itself fourth on the list, with a rate of 1 in every 2,697 housing units. This means 1,095 foreclosure filings across its roughly 2.9 million housing units.

• Key Counties Affected: Clinton, Vigo, and Pulaski counties are experiencing higher rates.
• My Take: Indiana has a strong manufacturing base, and the automotive sector has been particularly important. If there have been significant shifts or slowdowns in these industries, it could directly impact homeowners' ability to meet their mortgage obligations. It’s also possible that some of the housing market gains from previous years have plateaued or reversed, leaving some underwater.

5. South Carolina: The Palmetto State's Growth Pains

Rounding out the top five is South Carolina, with a foreclosure rate of 1 in every 2,883 housing units. This involves 833 filings.

• Key Counties Affected: Lexington, Kershaw, and Allendale counties are showing elevated concern according to the data.
• My Take: South Carolina has seen substantial growth, particularly in its coastal and Upstate regions. However, rapid expansion can sometimes outpace wage growth, and a significant portion of the population might be finding it harder to keep up with rising costs of living and homeownership. Like Florida, insurance costs could also be a factor here.

A Comprehensive Look Across All States

Here's a detailed breakdown of the foreclosure rates by state for September 2025. This table, using data directly from ATTOM's report, provides a clear comparison and allows us to see how all regions are performing.

Looking Ahead: What Does This Mean for You?

The rise in year-over-year foreclosure filings is a signal that we can't ignore. For those living in these affected states, or for anyone concerned about the housing market, it's a good time to be proactive.

• For Homeowners: If you're struggling to make your mortgage payments, don't wait. Reach out to your lender immediately to discuss options like loan modifications or payment plans. Explore local housing counseling agencies for free advice.
• For Potential Buyers: This data can highlight areas where there might be more distressed property opportunities, though it's crucial to do thorough due diligence. It also emphasizes the importance of a stable financial footing and understanding your long-term affordability.
• For Investors: Distressed properties can present opportunities, but they also come with risks. Careful analysis and understanding of the local market are paramount.

The housing market is a complex ecosystem, and this latest report from ATTOM provides a valuable, albeit concerning, look at the challenges homeowners are facing in certain parts of the country in 2025. By understanding these trends, we can better prepare and make informed decisions.