Foreclosures are climbing nationwide, up nearly 20% from last year. In the third quarter of 2025, over 101,000 U.S. properties had foreclosure filings.
While this is still far below the levels seen in 2008, it shows that some homeowners are feeling financial pressure.
How Foreclosures Happen
A foreclosure starts when a homeowner can’t keep up with mortgage payments.
Lenders usually give options like payment plans first. If the homeowner still can’t pay, the lender sends a notice of default, giving about 90 days to catch up.
If the debt isn’t paid, the home may go to public auction, and the highest bidder takes ownership.
Cities with the Highest Foreclosure Rates
Location matters. The worst-hit areas in Q3 2025 were:
- Lakeland, FL – 1 in every 470 homes
- Columbia, SC – 1 in every 506 homes
- Cape Coral, FL – 1 in every 589 homes
- Cleveland, OH – 1 in every 593 homes
- Ocala, FL – 1 in every 665 homes
Florida shows up three times in the top five, largely because of rising HOA fees, higher insurance costs, and a large population of retirees living on fixed incomes.
Pandemic-era mortgage relief is over, and many homeowners are struggling with resumed payments.
Other Factors
- High mortgage rates make refinancing difficult.
- Slower home price growth and longer market times make it harder to sell before defaulting.
- Local economic conditions affect foreclosure risk. Cities with lower property values or volatile job markets are more vulnerable.
A Silver Lining for Buyers
Foreclosures can present buying opportunities. Homes often sell at a discount—sometimes 15% below market value.
But most are sold “as is,” so buyers should be aware of repairs or liens. Working with a broker experienced in foreclosures is crucial.
Even with the rise, foreclosures remain well below historical peaks. However, continued increases could signal financial strain for homeowners in some markets.