Foreclosures Continue To Rise Across the U.S.—These 10 Metros Are Hardest Hit

by Kiri Blakeley

Foreclosure rates have surged across the country and are up almost 20% from this time last year.

"In 2025, we’ve seen a consistent pattern of foreclosure activity trending higher, with both starts and completions posting year-over-year increases for consecutive quarters,” says Rob Barber, CEO of ATTOM, a leading curator of land, property, and real estate data.

"While these figures remain within a historically reasonable range, the persistence of this trend could be an early indicator of emerging borrower strain in some areas."

There were a total of 101,513 U.S. properties with foreclosure filings during the third quarter of 2025, up less than 1% from the previous quarter, but up an astounding 17% from a year ago, says the firm's latest report.

ATTOM’s report incorporates documents filed in all three phases of foreclosure: default and notice of default; notice of foreclosure; and real estate owned or REO properties, defined as properties that have been foreclosed on and repurchased by a bank.

How does a foreclosure happen?

Homeowners have to first default on their mortgage, failing to pay their required monthly payments. And it's rare for lenders to begin foreclosure after just one late mortgage payment. Lenders usually offer alternatives during this period, including different payment plans to help the homeowners stay in their homes.

If a borrower can't come up with the funds to pay what they owe, a lender will issue a notice of default. This form will be sent to the mortgagee via a certified letter, and it typically gives a homeowner 90 days to pay off the most recent bill. This is the beginning of the formal process.

If the homeowner hasn't come up with the money within 90 days of the notice of default, the lender may proceed with the foreclosure. Next comes a notice of sale, which will state that the trustee (the lender) will sell the home at auction within 21 days.

The home will be sold at a public auction to the highest bidder, who will have to pay the full amount of the bid immediately. This buyer will receive a trustee's deed once the sale is complete, at which point he becomes the official owner.

Markets with the most foreclosures

Of course, where you live has a big impact on foreclosure rates.

Nationwide, 1 in every 1,402 housing units had a foreclosure filing in the third quarter of 2025. But some areas came away far worse than others.

Among 225 metropolitan areas with a population of at least 200,000, those with the worst foreclosure rates were Lakeland, FL (1 in every 470 housing units); Columbia, SC (1 in 506); Cape Coral, FL (1 in 589); Cleveland (1 in 593); and Ocala, FL (1 in 665).

It's no coincidence that three of the top five markets are in the Sunshine State.

While it remains the No. 1 retirement state in the country, its older population means many are living on fixed incomes as HOA and insurance costs climbed in the wake of the Surfside condo collapse and increased climate disasters.

"A huge percentage of Florida's residents are retired on fixed incomes, and such [HOA] increases are completely unaffordable," real estate investor Jameson Tyler Drew tells Realtor.com®. "This has led to a fire sale of condos as elderly residents look for places to live, all while losing their equity."

"Foreclosure rates in Florida may be relatively high due to some combination of surging insurance premiums, climbing HOA fees, and falling buyer demand," adds Hannah Jones, senior economic research analyst at Realtor.com.

"Additionally, many homeowners who were protected by pandemic-era forbearance or relief programs are now facing resumed payments they can’t afford in light of rising HOA and insurance costs."

Often, people will choose to walk away from a property rather than pay off an underwater mortgage. It makes little financial sense to pay off a loan for a property that is worth less than the loan.

"High mortgage rates also make refinancing out of trouble harder, leaving financially strained households with few options," adds Jones. "Additionally, slowing home price growth, climbing inventory, and longer time on the market mean fewer owners can sell quickly to avoid foreclosure."

While Florida's Homestead Law may protect a house from foreclosure, there are rules involved, including that the asset has to be a primary home, and not an investment property.

The top foreclosure market, Lakeland, FL, currently has nine foreclosure listings, from a two-bedroom single-family home for $139,900 to a four-bedroom house on 5 acres for $469,900.

Trish Carter, who deals in foreclosures in the Tampa area, including in Lakeland, says the findings don't surprise her.

"The REO brokers across the country is preparing for more foreclosures," she tells Realtor.com.

She points out that the COVID-19-era mortgage moratoriums are all ending and housing costs keep rising.

"Property taxes and insurance are going up," she says. "It's a challenge for everybody."

However, she says, "I don't think it will be a repeat of 2008."

Lenders repossessed 11,723 properties through foreclosure (REO) in the third quarter of 2025, up 4% from the previous quarter and a staggering 33% from a year ago.

There are other factors involved with foreclosure activity, including local unemployment rates.

Columbia, SC, which has the second-highest foreclosure rate, has seen troubling economic times.

"It's not because we have high unemployment; it's because people are not being paid a living wage,” Sue Berkowitz, policy director at the Appleseed Legal Justice Center, a nonprofit that advocates for low-income South Carolinians, told The State of the area's high rates in 2024.

As for fourth-ranked Cleveland, at least one mortgage lender blamed it on the area's high property taxes.

"Even though Cleveland homes are more affordable, many residents have lower incomes and limited savings, making them vulnerable to financial shocks," says Jones.

Metros with lower property values tend to be more susceptible to foreclosures.

California is one of the most expensive states in the union, but Bakersfield, CA, at No. 8, has a median price of $409,968, well below the state median of $878,500.

At No. 9, Las Vegas is particularly susceptible to foreclosures, explains Jones.

"The local economy’s dependence on tourism and hospitality makes incomes volatile when travel or consumer spending slows," she says. "With home prices softening slightly, some owners no longer have the equity cushion to sell before defaulting."

Additionally, Las Vegas is among the metros where homes are spending the longest time on the market, meaning owners can't expect a quick sale to avoid foreclosure without sacrificing price significantly, adds Jones.

The good news?

Overall foreclosure levels remain low by historical standards, and not nearly where they were in 2008, during the height of the real estate crisis. At the time, an astounding 1 in every 54 households received a foreclosure notice. (Even back then, Florida was tops in foreclosures.)

However, foreclosure rate gains, even if small over consecutive quarters, may not bode well for the housing market.

The silver lining

But with national home prices at historical highs, foreclosures can also be good news for buyers, who often come away with a 15% discount below the home's actual value. Just be certain you know what you're getting into.

Most foreclosures are sold as is. The bank, now the owner, isn't going to fix any issues the home might have. You may also be responsible for any lien on the property for back taxes.

It helps to work with a broker who is familiar with the foreclosure process and can guide you.