Lenders are reclaiming homes at a concerning pace across the country, with five states feeling the impact more severely than others.

The incidence of foreclosures, which happen when a homeowner fails to meet mortgage obligations and the bank repossesses the property, has surged by 14% compared to the previous year.

Throughout 2025, a total of 367,460 properties in the United States were subject to foreclosure filings, indicating they were at some stage of repossession, as reported by ATTOM.

Florida emerged as the epicenter of this issue, with one out of every 230 homes entering the foreclosure process. This troubling trend adds pressure to a state already dealing with escalating insurance rates and homeowners’ association fees.

Economist Michael Szanto highlighted that Florida’s escalating condo crisis significantly contributes to the problem.

“Florida is being hit particularly hard by substantial increases in assessments for older condo buildings,” Szanto noted, referencing the aftermath of the tragic Surfside condominium collapse in 2021 that led to stringent safety regulations statewide.

Close behind, Delaware and South Carolina were also near the eye of the storm, with roughly one in every 240 homes facing a filing.

The trouble didn’t stop there. Illinois and Nevada rounded out the top five, each seeing about one in 248 housing units pulled into the process – a sign the wave is washing across both Midwestern and Western markets.

Foreclosure is when a bank or lender takes back a home because the owner hasn’t made the required mortgage payments

Economist Michael Szanto

What’s striking is that there’s no clear pattern to the top five at all. 

They span beaches and bayous, the Midwest and the Mid-Atlantic, red states and blue, boomtowns and old industrial hubs alike. 

That scattershot lineup underscores just how widespread the foreclosure problem has become – this isn’t a regional slump, it’s a nationwide strain showing up in every corner of the map. 

Certainly, there’s no simple ‘one-size-fits-all’ reason why these very different states top the foreclosure rankings. 

Instead, the pressure points tend to be common economic stresses – rising costs outpacing incomes, affordability crunches, and market weaknesses – which are now showing up across the country, not just in one region or type of economy.

Experts warn even more homes may be seized in 2026. ‘If the job market weakens, and it may very well, then we could unfortunately down the road see the increase in the foreclosure rate significantly accelerate,’ said Szanto.   

The strain is showing in big cities, too. Among metros over one million people, Jacksonville led the nation in 2025 with one foreclosure for every 200 homes, followed by Las Vegas (1 in 210), Chicago (1 in 214), and Orlando (1 in 217).

Experts point to tight housing supply and higher mortgage rates locking out would-be buyers. While the numbers look alarming, Attom CEO Rob Barber says they reflect a ‘normalization’ after years of unusually low foreclosures.

The foreclosure storm hit hardest in the Sunshine State, where Florida (pictured) led the nation with one in every 230 homes slipping into the foreclosure pipeline

Delaware (pictured) and South Carolina weren’t far from the eye of the storm, with roughly one in every 240 homes facing a filing

Illinois (pictured) and Nevada joined the front line, each seeing about one in 248 housing units pulled into the process

Rob Barber, CEO at ATTOM

In smaller metros, the picture is even bleaker. Lakeland, Florida topped the list at one in 145 homes, followed by Columbia, South Carolina (1 in 165), Cleveland (1 in 187), Cape Coral, Florida (1 in 189), and Atlantic City, New Jersey (1 in 192).

The picture for the housing market — and the broader economy — is growing darker. The US added just about 584,000 jobs in 2025, marking the weakest year for job growth outside a recession since 2003.

As foreclosures climb, neighborhoods are being swamped with cut-price, bank-owned homes that pull down nearby property values. For many homeowners, that means watching their equity shrink simply because of their address.

The spike in foreclosure filings points to deeper financial strain. Homeowners hit by rising taxes and interest costs are falling behind, often missing other payments too, from credit cards to car loans.

All of it is stirring uneasy comparisons to the downturn of 2008.

If Americans are struggling to pay their mortgages, they’re likely cutting back on essentials like food, transportation, and healthcare – an affordability crunch that weighs on economic growth.