U.S. housing market woes worsen! Number of newly foreclosed properties in October surges by 20%.

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According to the latest data released on Thursday, after reaching historic lows in recent years, the number of home foreclosures in the United States rose again in October. Although the overall number is still not large, the continued increase in foreclosure cases may signal cracks emerging in the U.S. real estate market.

Property data and analytics firm Attom noted that in October there were 36,766 U.S. properties with some form of foreclosure record, including default notices, scheduled auctions, or bank repossessions. This figure is up 3% from September, up 19% from October 2024, and has posted year-over-year increases for eight consecutive months.

The initiation stage of foreclosure (the initial part of the process) increased by 6% from last month and 20% year-over-year; completed foreclosures (the final stage of the process) skyrocketed 32% year-over-year.

Attom CEO Rob Barber stated in a release: “Even with these increases, foreclosure activity remains significantly below historical highs. The current trend appears to reflect a gradual return to normalcy as market conditions adjust and some homeowners continue to face higher home prices and borrowing costs.”

Florida, South Carolina, and Illinois have the highest foreclosure rates in the U.S. Specifically, Tampa, Jacksonville, and Orlando in Florida reported the most foreclosures, followed by Riverside, California, and Cleveland, Ohio.

In terms of completed foreclosures, Texas, California, and Florida lead, meaning these states' markets will see more low-priced distressed properties. Since demand for affordable housing remains strong, these foreclosed properties may sell quickly.

Rick Sharga, CEO of real estate intelligence firm CJ Patrick Co., noted that during the peak of the financial crisis, over 4% of mortgages were in foreclosure; today, it's less than 0.5%, far below the historical average (which is between 1% and 1.5%). Also, about 4% of mortgages are currently delinquent, compared to nearly 12% during the financial crisis.

Sharga said: “So, there's no need to fear a foreclosure tsunami. However, there are still some areas to watch. The delinquency rate for Federal Housing Administration (FHA) loans exceeds 11%, accounting for 52% of all seriously delinquent loans; FHA foreclosure numbers are expected to increase further into 2026. Additionally, in states where home prices are declining while insurance premiums are soaring—especially Florida and Texas—default rates are rising.”

Although U.S. home prices have softened slightly nationwide, they remain high. Meanwhile, even though the Federal Reserve has begun to cut rates, mortgage rates are still hovering at recent highs, only about one percentage point below their recent peak. Some recent homebuyers may have planned to refinance now at lower rates, but are facing greater pressure, while inflation remains stubbornly elevated.

In addition, U.S. consumer debt has hit a historic high, delinquencies on other types of consumer credit are also rising, and there are signs of weakness in the job market—factors that may further destabilize the real estate market.

Sharga said: “These issues have not yet affected mortgage performance, but to believe that these trends—combined with slowing home sales and slower price growth—won't lead to somewhat higher delinquencies and defaults in the coming months, would be overly optimistic.”

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