According to ATTOM’s Q1 2025 U.S. Foreclosure Market Report, foreclosure activity across the country is beginning to rise again after three consecutive quarters of decline. A total of 93,953 U.S. properties had foreclosure filings in the first quarter of 2025, marking an 11% increase from Q4 2024. While this represents only a 2% decrease year-over-year, it signals a potential turning point as economic pressures mount for many households.
A Shift After Sustained Declines
“Following three consecutive quarters of decline, foreclosure activity ticked up in the first quarter of 2025, with notable growth in both starts and completions,” said Rob Barber, CEO at ATTOM. “While levels remain below historical averages, the quarterly growth suggests that some homeowners may be starting to feel the pressure of ongoing economic challenges. However, strong home equity positions in many markets continue to help buffer against a more significant spike in distress.”
This shift may not yet indicate a crisis, but it’s enough to prompt closer attention from real estate investors, lenders, and policymakers alike.
Foreclosure Starts Climb 14%
One of the most telling signs of brewing distress is the 14% increase in foreclosure starts, with 68,794 properties entering the foreclosure pipeline in Q1 2025—also up 2% from a year ago.
States with the most notable year-over-year increases in foreclosure starts include:
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Kansas (up 117%)
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Delaware (up 58%)
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Oklahoma (up 45%)
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Utah (up 42%)
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Wyoming (up 33%)
Among major metro areas, the highest numbers of foreclosure starts were seen in:
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Chicago, IL – 3,789
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New York, NY – 3,566
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Houston, TX – 3,046
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Miami, FL – 2,028
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Philadelphia, PA – 1,985
These numbers point to growing financial strain across a wide geographic swath of the U.S., including both major urban centers and less populous states.
Where Foreclosures Are Hitting Hardest
Nationwide, one in every 1,515 housing units had a foreclosure filing in Q1. However, some states are seeing much higher distress rates:
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Delaware – 1 in every 761 housing units
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Illinois – 1 in every 857
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Nevada – 1 in every 874
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Indiana – 1 in every 976
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South Carolina – 1 in every 1,021
Among metros with populations over 200,000, the areas with the highest foreclosure rates include:
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Columbia, SC – 1 in every 683 units
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Lakeland, FL – 1 in every 694
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Bakersfield, CA – 1 in every 718
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Riverside, CA – 1 in every 721
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Chico, CA – 1 in every 724
These metros are often regions where home prices rose rapidly during the pandemic-era boom, and the recent economic volatility—including inflation, higher borrowing costs, and stagnating wage growth—may be exposing vulnerabilities.
Bank Repossessions Edge Higher
Lender repossessions (REOs) also rose in Q1 2025, with 9,691 properties repossessed, an 8% increase over Q4 2024. While this figure is still modest compared to the worst years of the 2008 housing crash, it highlights that more homes are completing the foreclosure cycle rather than being resolved through sales or loan modifications.
Outlook: Strong Equity as a Buffer, But Risk Rising
Despite the uptick, experts emphasize that foreclosure levels are still below historic norms. One major reason: homeowners still hold record levels of equity, which can help many avoid foreclosure by selling their property if needed.
However, the growing number of starts suggests that economic strain is beginning to erode the safety net for some. The continued burden of high mortgage rates hovering around 7%, combined with inflationary pressures and potential job market softening, could push more borrowers toward default in coming quarters.
Key takeaway: While we are not yet witnessing a foreclosure crisis, early warning signs are emerging. Markets with high growth and volatile pricing—such as parts of California, Florida, and the Midwest—should be closely monitored as the economic picture continues to evolve.
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