There’s a certain kind of dread that gradually takes hold. Spreadsheets and county court filings, houses sitting on the market longer than anyone anticipated, and families silently falling behind on payments they once thought they could manage are examples of a more subdued kind of panic than the sharp panic of a stock market crash unfolding on a ticker. For some time now, that fear has been growing. The data is now starting to support what many economists had been secretly fearing.
According to ATTOM, a housing data and analytics company, 118,727 properties were in some stage of the foreclosure process during the first three months of 2026.
| Category | Details |
|---|---|
| Topic Focus | U.S. Residential Foreclosure Surge, 2025–2026 |
| Primary Data Source | ATTOM Data Solutions — Real Estate & Housing Analytics Firm |
| Key Statistic | 118,727 properties in foreclosure Q1 2026 — highest since 2020 |
| Year-over-Year Increase | Up 26% from Q1 2025 |
| Foreclosure Starts Rise | Up 20% from one year ago |
| Hardest-Hit States | Indiana, South Carolina, Florida, Delaware, Illinois |
| Hardest-Hit Cities | Lakeland FL, Punta Gorda FL, Columbia SC, Fayetteville NC, Macon GA |
| Current Mortgage Rate | 6.24% (30-year fixed) — Source: Freddie Mac |
| Home Sales Trend | Down 0.3% year-over-year as of November 2025 |
| Median Days on Market | 49 days — longest for this period since 2019 |
| Inflation Context | CPI up 3% year-over-year; 1.7% above January 2025 levels |
| Notable Investor Signal | Michael Burry (of The Big Short fame) deregistered hedge fund, betting against major tech companies |
| Policy Proposals | Trump suggested 50-year mortgages; executive order banning Wall Street from buying single-family homes |
| Expert Reference | Redfin Housing Market Data — real-time home sales & market trends |
This is a 26% increase from the same period last year and the highest number since 2020. The number of foreclosures increased by 20% over the previous year. These figures by themselves aren’t disastrous, but the picture that emerges when background information is gathered around them is unsettling. After about thirteen years of historically low borrowing costs, mortgage rates have remained stubbornly above six percent since September 2022. For over five years, inflation has exceeded the Federal Reserve’s two percent target. Average house prices are still close to all-time highs. Combining all of that makes it more difficult to write off the trend as statistical noise.
The pressure is most noticeable in areas like Lakeland and Punta Gorda, Florida. Not exactly what Florida’s real estate sector tends to promote, those two cities had the highest foreclosure rates among American cities with populations over 200,000. The states with the most concerning increases in the ratio of foreclosed homes to total housing stock are South Carolina, Indiana, and Illinois. Walking through some of these Southern metro areas gives the impression that many people were overextended by the post-pandemic real estate boom.
The disagreement among experts regarding the precise meaning of the numbers is part of what makes this moment difficult to read. The increase, according to Rob Barber, CEO of ATTOM, is proof that homeowners who have been treading water for years are finally being affected by rising housing and borrowing costs. It makes sense to read that. However, Donna Schmidt, CEO of DLS Servicing, a company that assists mortgage lenders in navigating the foreclosure and repossession process, contends that the increase is at least partially the result of pressure that was unjustly restrained. For five years, homeowner protections during the pandemic prevented foreclosure filings. These safeguards are no longer in place, and the cases that would have occurred sooner are now progressing through the system. This moment is truly murky because it’s possible that both things are true at the same time.
Customer sentiment is more difficult to explain. According to reports, Americans are now more concerned about their personal finances than they were during the worst of the 2008 Great Recession. A few years ago, this comparison would have seemed almost absurd, but it hardly raises an eyebrow today. Early November saw a 0.3 percent year-over-year decline in home sales. For the longest period of time this time of year since 2019, listings have been on the market for a median of 49 days. Investor Michael Burry, who was well-known for betting against the housing market prior to the 2008 financial crisis, has discreetly closed his hedge fund and started betting against big tech firms. He has hinted, but not explicitly stated, that he believes another bubble is forming in the US economy.
The solutions put forth by the Trump administration have been met with courteous skepticism. Yes, a 50-year mortgage would result in lower monthly payments, but it would also significantly raise the total interest paid over the course of the loan—a trade-off that clearly benefits lenders rather than buyers. Although experts point out that institutional buyers make up a small portion of the market and that the order’s actual impact on prices may be minimal, an executive order prohibiting Wall Street investors from buying single-family homes is directionally reasonable. Whether either plan will make a significant difference is still up for debate.
The disconnect between official messaging and the real-life experiences of those attempting to purchase, sell, or just hang onto a home at this time is difficult to ignore. Economists warned of a foreclosure wave, but it hasn’t yet peaked. However, the information found in housing reports and county records indicates that it is no longer a far-off theory; rather, it is quietly and unannouncedly making its way, neighborhood by neighborhood.
