Client-Facing Market Brief • May 2026
Are Foreclosures Really Spiking?
Yes, foreclosure activity is rising. No, the data does not currently show a repeat of the 2008–2010 housing crisis. The better explanation is a normalization from COVID-era foreclosure freezes, combined with affordability pressure, FHA stress, higher insurance/taxes, and weaker local housing markets.
Print / Save as PDFPrepared for client education by The Rate Update with Dan Frio • Data current through March/Q1 2026 where available
Q1 2026 filings
118,727
U.S. properties with a foreclosure filing; up 26% year over year.
March 2026 filings
45,921
Up 18% from February and 28% from March 2025.
2025 full-year filings
367,460
Up from 2024, but still 25% below 2019.
Versus 2010 crisis peak
-87%
2025 foreclosure filings were 87% below the nearly 2.9 million 2010 peak.
Bottom Line
Foreclosures are rising, but this is not yet a national foreclosure wave.
The current increase is real and should be watched. But the base of comparison matters: COVID created an artificially low foreclosure period because many federally backed borrowers could pause payments and foreclosure actions were restricted. Today’s numbers are moving back toward normal, not exploding back to Great Recession levels.
WatchNot crash-levelLocalized risk
1. What COVID Forbearance Changed
Plain-English client explanation: During COVID, many homeowners with federally backed mortgages — including Fannie Mae, Freddie Mac, FHA, VA, and USDA loans — had access to mortgage forbearance. That did not mean the debt disappeared. It generally meant payments could be paused or reduced for a period, and borrowers were later evaluated for repayment, deferral, modification, or other loss-mitigation options.
For Fannie Mae and Freddie Mac loans, FHFA extended single-family foreclosure and REO eviction moratoriums through June 30, 2021, and allowed qualifying borrowers to stay in COVID forbearance for up to 18 months. Separately, federal servicing protections generally limited new foreclosure starts before January 1, 2022 unless procedural safeguards were satisfied.
That matters because 2020–2022 foreclosure data was not a clean picture of normal homeowner distress. It was heavily distorted by government relief, servicer restrictions, strong home-price appreciation, and later loss-mitigation programs.
2. Historic Foreclosure Comparison
The media headline “foreclosures are spiking” can be technically true while still misleading. A 20%–30% jump from a suppressed base sounds scary, but today’s volume remains dramatically below the foreclosure crisis era.
| Period | Foreclosure filings | Why it matters |
|---|
| 2010 | Nearly 2.9 million | Great Recession / housing crash peak. |
| 2019 | 493,066 | Pre-pandemic baseline; also a 15-year low at the time. |
| 2021 | 151,153 | Artificially low due to COVID-era protections and forbearance. |
| 2023 | 357,062 | Post-COVID normalization, still below 2019. |
| 2024 | 322,103 | Down from 2023 and 35% below 2019. |
| 2025 | 367,460 | Up 14% from 2024, but still 25% below 2019 and 87% below 2010. |
| Q1 2026 | 118,727 in one quarter | Up 26% year over year; trend deserves monitoring. |
3. Where Foreclosures Are Highest Right Now
ATTOM’s Q1 2026 data shows the worst foreclosure rates in Indiana, South Carolina, Florida, Delaware, and Illinois. The highest-volume states are generally larger states: Florida, California, Texas, New York, Illinois, and Ohio.
Top foreclosure-rate states — Q1 2026
| Rank | State | Total filings | Foreclosure rate | Change vs Q1 2025 |
|---|
| 1 | Indiana | 4,028 | 1 in every 739 housing units | +33.16% |
| 2 | South Carolina | 3,288 | 1 in every 743 | +39.74% |
| 3 | Florida | 13,683 | 1 in every 750 | +43.67% |
| 4 | Delaware | 613 | 1 in every 757 | +1.83% |
| 5 | Illinois | 6,551 | 1 in every 833 | +3.08% |
| 6 | Nevada | 1,566 | 1 in every 847 | +4.68% |
| 7 | New Jersey | 4,166 | 1 in every 910 | +14.04% |
| 8 | Maryland | 2,732 | 1 in every 937 | +43.87% |
| 9 | Ohio | 5,499 | 1 in every 962 | +32.99% |
| 10 | Georgia | 4,549 | 1 in every 998 | +77.83% |
Metro warning zones
Worst Q1 2026 metro foreclosure rates included Lakeland, FL; Punta Gorda, FL; Columbia, SC; Fayetteville, NC; and Macon, GA. Among larger metros, ATTOM identified Cleveland, Jacksonville, Indianapolis, and Orlando among the top-20 worst foreclosure-rate metros.
4. Who Is Most at Risk?
- FHA and lower-down-payment borrowers: delinquency pressure is more visible in FHA performance data and loss-mitigation changes.
- Recent buyers: people who bought at high prices and higher rates have less payment flexibility.
- Fixed-income homeowners: rising taxes, insurance, HOA dues, and repair costs can break the budget even if the mortgage rate is low.
- Weak-price markets: where home values flatten or fall, homeowners have less room to sell, refinance, or tap equity.
- Judicial foreclosure states: long timelines can delay the visible impact, causing a pipeline effect.
Risk Score: National Market
Low risk of a 2008-style national crash: current foreclosure volumes remain far below crisis levels, lending standards are tighter, and many homeowners still have equity.
Moderate localized risk: some states and metros have rising starts, higher foreclosure rates, and more affordability stress. This can create local inventory pockets and distressed-sale opportunities.
What the Delinquency Data Says
ICE reported that March 2026 mortgage delinquencies improved seasonally, with the national delinquency rate falling to 3.35%. That is a healthy broad-market reading. However, ICE also warned that serious delinquencies and foreclosure pipelines are worth watching, with 154,000 more borrowers 90+ days delinquent or in active foreclosure than one year earlier.
The New York Fed made a similar point: mortgages still perform well by historical standards, but delinquency increases are showing up faster in lower-income areas and places with weaker labor or housing-market conditions.
5. Client Talking Points
Simple client version:
“You may hear that foreclosures are spiking, and technically they are rising. But the context matters. During COVID, many homeowners with federally backed mortgages had forbearance options, and foreclosure actions were restricted. That pushed foreclosure numbers artificially low. Now we’re seeing a normalization.”
“The current data does not show a repeat of 2008. In 2010, nearly 2.9 million properties had foreclosure filings. In 2025, there were about 367,000 — still 87% below that crisis peak. What we are watching is stress in certain states, FHA borrowers, recent buyers, and homeowners squeezed by higher taxes, insurance, HOA costs, and repairs.”
“For buyers, this does not mean a national flood of cheap homes is guaranteed. For homeowners, it does mean you should act early if you’re struggling. Waiting until you’re 90 days behind gives you fewer options. Call your servicer, review loss mitigation, and talk to a mortgage professional before the situation becomes a foreclosure filing.”
Advisor Takeaway
For homebuyers: Do not build your strategy around a nationwide foreclosure crash. Look for local pockets of distress instead: Florida metros, parts of South Carolina, Indiana, Illinois, Ohio, Georgia, and other high-rate markets.
For homeowners: equity is still the biggest safety valve. If you are behind, the most important move is early action — call the servicer, review all repayment/deferral/modification options, and explore whether selling, refinancing, or restructuring debt makes sense before legal costs and late fees stack up.
For investors/Realtors: watch foreclosure starts, not just completed REOs. Starts are the early-warning indicator. REOs lag because timelines can run hundreds or thousands of days depending on the state.
For content: the strongest headline is: “Foreclosures Are Rising — But This Is Not 2008.”
6. Sources Used
- ATTOM Q1 2026 U.S. Foreclosure Market Report: https://www.attomdata.com/news/market-trends/foreclosures/q1-and-march-2026-foreclosure-market-report/
- ATTOM March 2026 State Foreclosure Rates: https://www.attomdata.com/news/most-recent/foreclosure-rates-by-state/
- ATTOM 2025 Year-End Foreclosure Market Report: https://www.attomdata.com/news/market-trends/foreclosures/2025-year-end-foreclosure-market-report/
- ATTOM 2024 Year-End Foreclosure Market Report: https://www.attomdata.com/news/most-recent/2024-year-end-foreclosure-market-report/
- ATTOM 2023 Year-End Foreclosure Market Report: https://www.attomdata.com/news/market-trends/foreclosures/attom-2023-year-end-u-s-foreclosure-market-report/
- ATTOM 2019 Year-End Foreclosure Market Report: https://www.attomdata.com/news/market-trends/foreclosures/attom-data-solutions-2019-year-end-u-s-foreclosure-market-report/
- ICE March 2026 First Look Mortgage Performance: https://ir.theice.com/press/news-details/2026/Seasonal-Improvements-Lowered-Mortgage-Delinquencies-in-March-While-Prepayment-Activity-Reached-Nearly-Four-Year-High/default.aspx
- New York Fed / Liberty Street Economics, February 2026 mortgage delinquency analysis: https://libertystreeteconomics.newyorkfed.org/2026/02/where-are-mortgage-delinquencies-rising-the-most/
- FHFA COVID-19 forbearance and foreclosure moratorium extension: https://www.fhfa.gov/news/news-release/fhfa-extends-covid-19-forbearance-period-and-foreclosure-and-reo-eviction-moratoriums
- CFPB COVID-era mortgage servicing / foreclosure protections: https://www.consumerfinance.gov/about-us/blog/new-mortgage-servicing-rule-aims-to-prevent-avoidable-foreclosures-as-protections-expire/
Educational use only. This is not legal, tax, credit, or investment advice. Foreclosure laws and timelines vary by state, investor, servicer, loan type, and borrower circumstance.
