Foreclosures, repossessions rising after pandemic-era lows

Bank repossession of homes has increased 33% from a year ago while foreclosure filings are up 17%, a new ATTOM report finds.

After dipping to historic lows during the pandemic thanks to economic relief programs and a massive injection of stimulus funds, foreclosure starts and lender repossessions appear to be back on the rise in a meaningful way, according to a new report from ATTOM.

Some of the highest distress levels are in regions that ATTOM flagged as particularly vulnerable a year ago — or longer, according to the company's Q3 2025 U.S. Foreclosure Market Report. 

Foreclosures back on the rise: In the third quarter of 2025, 101,513 U.S. properties had some form of foreclosure filing, ATTOM researchers found — a 17% increase from a year ago.

Perhaps more troubling is the 33% year-over-year increase in bank repossessions (also called REOs), which is likely to signal further foreclosures down the line. Nationwide, one in every 1,402 homes had a foreclosure filing in Q3 2025, the report said. 

Texas, Florida and California have the most foreclosures: Some of the country's most populous states also have the most foreclosure activity. Texas topped the list with 9,736 foreclosure starts during the third quarter. Florida (8,909), California (7,862), Illinois (3,515) and New York (3,234) rounded out the top five. 

Of the top metros in these states, Houston posted the most foreclosure starts with 3,763. New York City followed with 3,452, Chicago saw 3,144, Miami tallied 2,502 and Los Angeles had 2,321. ATTOM previously issued at least two reports in the summer of 2024 suggesting that counties in the Chicago and New York metro areas — as well as a large portion of California — could be ripe for a downturn. 

In terms of cities with the worst foreclosure rates, Florida appeared well represented. Researchers indicated that one in every 470 homes in Lakeland had a foreclosure filing in the third quarter, while one in every 589 homes in Cape Coral and one in every 665 homes in Ocala were facing foreclosures. 

Why the acceleration? While economic uncertainty has been a major barrier for buyers for at least the last couple of years, financial hardship also appears to be taking a toll on homeowners. In addition to persistent economic pressures — namely inflation and higher interest rates — the pandemic-era buffers from foreclosure, such as forbearance programs and consumer savings, are long gone. 

Additionally, the cost of homeownership has risen significantly in states like Florida and California, where the home insurance strain has reached crisis levels. ATTOM noted in its report that the time taken to foreclose on homes has also accelerated, with the process now taking about 608 days compared to over 800 days a year ago. This means that distressed properties are now moving through the system faster, leading to a higher visible REO count.