A dramatic increase in foreclosure filings is the latest bad news for the US housing market, with one state particularly hard hit. 

In August there were a total of 35,697 properties in the US with foreclosure filings, according to a report by ATTOM. 

This represents a 1 percent decrease from the previous month, but an 18 percent increase compared to 2924.

August was the sixth consecutive month of year-on-year increases in foreclosures and the third month straight with double-digit annual growth. 

Nevada was worst affected last month, with a foreclosure filing for one in every 2,069 housing units.

Foreclosure is when a bank or lender takes back a home because the owner has fallen behind on their required mortgage payments. 

The ongoing increase in both the initiation and completion of foreclosures indicates that some homeowners might be facing additional financial challenges amidst today’s high-cost and high-interest-rate environment, explained ATTOM’s CEO, Rob Barber.

“Foreclosures are damaging both individually and economically. For homeowners, this often leads to the loss of their property, financial hardship, and emotional distress,” Barber told the Daily Mail.

“In terms of the market, a continued rise in foreclosures could be a sign of deeper economic issues, since the ability of homeowners to repay loans is closely connected to factors like jobs, wages, and interest rates.”

Rob Barber, CEO at ATTOM

‘Ultimately, they can reflect larger issues within the housing and financial systems, creating ripple effects across the economy,’ he continued. 

On Wednesday, the Federal Reserve lowered interest rates for the first time since December 2024, but rates remain elevated at between 4 percent and 4.25 percent.

Nationwide, one in every 3,987 housing units had a foreclosure filing in August 2025. 

Nevada, South Carolina, and Florida were the states with the highest foreclosure rates, with one in every 2,069, 2,152, and 2,512 housing units affected, respectively.

The major metropolitan areas with populations over 1 million and the highest foreclosure rates in August 2025 were Cleveland, OH, Las Vegas, NV, Jacksonville, FL, Houston, TX, and Orlando, FL.

Growing numbers of homeowners falling into foreclosure is the latest sign of distress for Las Vegas, which has seen tourist numbers plummet and unwanted homes pile up on the market. 

In Florida, a rising number of foreclosures is just one of the many battles homeowners are fighting.

Earlier this summer, Chen Zhao, the head of economics research for Redfin, described South Florida as the ‘epicenter of housing market weakness’ in the US. 

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

Foreclosure can sometimes lead to homes being left vacant (Pictured: An abandoned house on Route 66 in Oklahoma)

Zhao’s words came amidst a growing condo crisis and soaring insurance prices in the state, which skyrocketed after Florida was ravaged by Hurricane Milton in October 2024. 

Lakeland, FL, was hit the hardest of all the 225 metropolitan statistical areas with a population of at least 200,000. The city – located between Tampa and Orlando – saw one foreclosure filing for ever 1,212 housing units. 

For homeowners, foreclosures are bad not only because they lose their home, but because their credit score might be damaged and they may find it more challenging to rent or qualify for another mortgage. 

Foreclosures can also be bad for communities because foreclosed homes are usually sold below market price – lowering the value of surrounding properties as well. 

‘Widespread foreclosures can also drag down neighborhood property values, increase vacancy rates, and place additional strain on local services and infrastructure,’ Barber told the Daily Mail. 

Growing numbers of homeowners falling into foreclosure is the latest sign of distress for Las Vegas 

A dramatic increase in foreclosure filings is the latest bad news for the US housing market 

Vacant or poorly maintained homes also attract crime and reduce overall neighborhood appeal.   

‘You’re likely to see a spike in foreclosures after there’s been a rise in unemployment and a period of high mortgage rates,’ Barber explained. 

‘This is because homeowners tend to default on their mortgages after a period of sustained economic hardship or a loss of income.’

However investors might see foreclosures as an opportunity to buy cheaper properties.  

‘During periods of elevated foreclosure activity, big institutional investors often step in to purchase distressed properties,’ Barber said. 

‘These buyers tend to view foreclosures as opportunities to acquire homes at a discount.’