Are Foreclosures On the Rise? 2026 Foreclosure Rates by State

Foreclosures are rising in 2026. Filings ran about 21% higher in the first half of the year than they did a year ago, and foreclosure starts climbed 18% (ATTOM, 2026). That sounds alarming until you look at where the number sits on a longer chart, and until you look at who is actually falling behind. This is not 2008 coming back around. The reason foreclosures are rising has almost nothing to do with a broad housing collapse and almost everything to do with one squeezed group of homeowners getting hit by costs that have nothing to do with their loan.

I want to walk through what the data says, why the increase is happening, and what it means if you buy distressed property for a living. The headline number is the least interesting part of this story.

Are Foreclosures on the Rise in 2026?

Yes. A total of 227,548 U.S. properties had a foreclosure filing in the first six months of 2026, up 21% from the same period a year earlier and up 28% from two years ago (ATTOM, 2026). Foreclosure starts, meaning properties that just entered the process, hit 164,566, up 18% year over year. Lenders repossessed 27,983 homes through the REO process, up 33% from the first half of 2025 (ATTOM, 2026).

So the direction is clearly up. Every stage of the pipeline grew.

Now put it on a timeline. Here is what first-half foreclosure activity has looked like since 2008.

Year	Properties With Filings (Jan–Jun)
2008	1,332,991
2009	1,528,364
2010	1,654,634
2011	1,170,402
2012	1,045,801
2013	801,359
2014	613,874
2015	597,589
2016	535,829
2017	428,400
2018	362,275
2019	296,458
2020	165,530
2021	65,082
2022	164,581
2023	185,580
2024	177,431
2025	187,659
2026	227,548

The 2021 number looks broken, but it is real. A federal foreclosure moratorium froze most of the process through the middle of that year, so filings cratered to 65,082 and then snapped back once the freeze lifted. When you read that we are up 21% year over year, part of that climb is the market still working its way back to normal after an artificial floor.

Here is the part the percentage jumps hide. In the first half of 2010, more than 1.65 million properties had a filing. In 2026, the figure is 227,548. We are running at roughly one-seventh of the crisis peak. The foreclosure trend is up, but the level is still low. Both things are true, and holding both in your head at once is the whole game here.

Why Are Foreclosures Rising if the Housing Market Is Healthy?

Foreclosures are on the rise because the cost of keeping a home is climbing faster than some owners can absorb, and that pressure lands hardest on buyers with the smallest financial cushion. Jobs are the usual trigger for a foreclosure wave. This time unemployment stayed low and the wave started anyway, which tells you the pressure is coming from somewhere else.

Three forces are stacking on top of each other. Let me take them one at a time.

The FHA and Entry-Level Divide

The overall mortgage delinquency rate rose to 4.44% in the first quarter of 2026, up 40 basis points from a year earlier (MBA, 2026). That blended figure buries the real story. Conventional loans stayed relatively flat. FHA loans did not. The FHA delinquency rate sat about 900 basis points above the conventional rate, the widest that gap has run in years (MBA, 2026).

An FHA loan is a government-insured mortgage aimed at first-time and lower-income buyers, and it lets people in with a down payment as low as 3.5%. That accessibility is the whole point. It is also why FHA borrowers break first when costs rise. They bought with the thinnest equity and the tightest monthly budget, so they have the least room to absorb a surprise.

You essentially have two mortgage markets right now. One is calm. The other is under real strain. When you read a single national delinquency number, you are reading an average of those two, and the average hides exactly the group an investor cares about.

Escrow and Insurance Payment Shock

This is the piece most coverage skips, and it is the one I find most useful. A borrower can have a fixed-rate mortgage and still watch the monthly payment climb, because the payment includes more than principal and interest.

Most owners pay property taxes and homeowners insurance through an escrow account bundled into the mortgage. The lender collects a twelfth of the annual tax and insurance bill each month, then pays those bills when they come due. When taxes or premiums rise, the escrow portion rises with them, and the “fixed” payment is suddenly not fixed.

Both bills have been climbing hard.

Escrow costs jumped roughly 45% between 2019 and 2026, and about 65% of escrow accounts are running a shortage in 2026, with the average shortfall near $2,100 and adding roughly $175 to the monthly payment (Cotality, 2026). Homeowners insurance did its own damage. The average annual premium rose 12% in 2025 to $2,948, with another 4% projected for 2026, which puts premiums up about 46% since 2021 (Insurify, 2026).

Now stack that on an FHA borrower who put 3.5% down. An extra $175 a month is the difference between making it and missing it. Escrow cost increases have been steepest in states like Colorado and Florida, both up more than 70% since 2019 (Cotality, 2026), which is one reason those states keep showing up in the foreclosure rankings.

The 2022 to 2023 Buyers Are Breaking First

Not every FHA borrower is struggling equally. The loans going bad skew heavily toward people who bought in 2022 and 2023 (MBA, 2026). Those buyers locked in at the top of the rate cycle and the top of the price cycle, so they carry the highest payments and the least equity. When escrow creep hit, they had nowhere to go.

A trigger sits under all of this too. Pandemic-era FHA relief options expired at the end of September 2025 (MBA, 2026). While those programs ran, struggling borrowers had a place to land. Once they ended, stress that had been papered over started showing up as filings.

Is This Another 2008?

No, and the difference matters more than the similarity. The 2008 crisis ran on mass job loss, adjustable-rate loans that reset to payments people never could have afforded, and home prices falling out from under millions of borrowers at once. It hit the entire market.

What we have in 2026 is narrow by comparison.

Cost creep is squeezing one segment while prime borrowers hold steady and homeowners in general sit on near-record equity. Look back at the table. Even after a 21% jump, first-half filings are a fraction of what 2010 produced. A rising trend off a low base is a very different animal than a collapse, and reading one as the other will cost you either way, whether you panic or you get greedy.

H1 2026 Foreclosure Rates by State (US)

Florida had the worst foreclosure rate in the first half of 2026, with 0.27% of housing units getting a filing, followed by South Carolina at 0.26%, then Indiana, Delaware, and Illinois (ATTOM, 2026). Nationally, one in every 632 housing units had a filing. Here is the full state picture.

State	Filings	Rate	1 in X	vs 2025	vs 2024
U.S. Total	227,548	0.16%	632	+21.3%	+28.3%
Alabama	3,671	0.16%	637	+20.8%	+43.1%
Alaska	339	0.11%	943	+5.9%	+63.8%
Arizona	5,412	0.17%	590	+29.1%	+77.3%
Arkansas	1,750	0.13%	797	+44.6%	+54.9%
California	21,543	0.15%	680	+12.8%	+13.3%
Colorado	3,943	0.15%	657	+56.7%	+121.0%
Connecticut	1,763	0.11%	875	-31.1%	-38.4%
Delaware	1,148	0.25%	404	+11.1%	+39.0%
District of Columbia	614	0.17%	588	+12.0%	-6.8%
Florida	27,494	0.27%	373	+32.7%	+36.9%
Georgia	8,433	0.19%	539	+52.4%	+59.4%
Hawaii	436	0.08%	1,303	-12.5%	+6.9%
Idaho	969	0.12%	820	+59.1%	+62.6%
Illinois	12,533	0.23%	435	+2.0%	+10.6%
Indiana	7,408	0.25%	402	+38.2%	+55.0%
Iowa	2,200	0.15%	653	+5.4%	+36.6%
Kansas	651	0.05%	1,987	+15.2%	+34.2%
Kentucky	2,053	0.10%	985	+19.2%	+24.9%
Louisiana	2,911	0.14%	724	+5.7%	+30.9%
Maine	727	0.10%	1,034	-1.6%	+21.2%
Maryland	4,985	0.19%	514	+36.4%	+4.7%
Massachusetts	2,719	0.09%	1,115	+3.2%	-20.3%
Michigan	6,318	0.14%	732	+4.3%	+21.3%
Minnesota	3,145	0.12%	809	+43.2%	+46.1%
Mississippi	934	0.07%	1,436	+45.5%	+15.2%
Missouri	2,749	0.10%	1,028	+31.8%	+58.9%
Montana	320	0.06%	1,651	+101.3%	+127.0%
Nebraska	636	0.07%	1,358	+31.4%	+42.6%
Nevada	2,935	0.22%	452	+6.4%	+17.6%
New Hampshire	488	0.08%	1,329	+23.5%	+15.1%
New Jersey	8,269	0.22%	459	+21.1%	+2.4%
New Mexico	1,196	0.12%	800	+21.1%	+61.4%
New York	11,983	0.14%	716	+16.1%	+5.9%
North Carolina	8,429	0.17%	581	+46.7%	+86.1%
North Dakota	250	0.07%	1,509	+18.5%	+30.2%
Ohio	10,698	0.20%	495	+23.6%	+15.8%
Oklahoma	2,509	0.14%	708	+14.4%	+44.7%
Oregon	1,588	0.09%	1,170	+31.9%	+58.5%
Pennsylvania	8,399	0.14%	691	+19.6%	+17.6%
Rhode Island	248	0.05%	1,959	-34.9%	-2.0%
South Carolina	6,419	0.26%	381	+31.9%	+40.5%
South Dakota	170	0.04%	2,383	+261.7%	+100.0%
Tennessee	3,001	0.10%	1,048	+23.9%	+28.9%
Texas	22,000	0.18%	551	+19.7%	+40.9%
Utah	2,292	0.19%	534	+29.5%	+88.8%
Vermont	95	0.03%	3,569	-8.7%	+6.7%
Virginia	3,741	0.10%	985	+18.5%	+36.2%
Washington	2,482	0.08%	1,332	+0.4%	+40.9%
West Virginia	387	0.04%	2,226	-17.1%	+9.6%
Wisconsin	1,808	0.07%	1,537	+5.5%	+17.2%
Wyoming	357	0.13%	776	+39.5%	+104.0%

Are Foreclosures on the Rise in Every State?

Two different stories live in that table, and you have to read them separately.

The states at the top by rate, Florida, South Carolina, Indiana, Delaware, Illinois, New Jersey, are partly there because of how they process foreclosures. Judicial states run every foreclosure through the court system, which is slow, so filings pile up and sit in the count longer. Nonjudicial states move faster and clear the pipeline quicker. A high rate in a judicial state reflects accumulation as much as fresh distress, and lumping in with foreclosure properties more broadly, it pays to know which kind of state you are working.

The states at the top by growth tell you where new stress is landing right now. Idaho was up 59%, Colorado 57%, Georgia 52%, North Carolina 47%, and Mississippi 45% (ATTOM, 2026). Ignore South Dakota’s 262%, that is a tiny state where a handful of extra filings swings the percentage wildly. The mid-sized states climbing 45% to 59% are the ones worth watching, because that is genuine new movement, not a rounding artifact.

And a few states went the other way. Connecticut fell 31% and Rhode Island fell 35% year over year (ATTOM, 2026). Distress is not rising everywhere, which is more evidence this is a targeted squeeze rather than a national one.

Which Metro Areas Have the Worst Foreclosure Rates?

Florida metros dominate the worst-rate list. Punta Gorda had the highest metro foreclosure rate in the first half of 2026 at 0.50% of housing units, followed by Lakeland at 0.48%, then Columbia, South Carolina, Macon, Georgia, and Fayetteville, North Carolina (ATTOM, 2026).

Metro Area	Foreclosure Rate (% of Housing Units)
Punta Gorda, FL	0.50%
Lakeland, FL	0.48%
Columbia, SC	0.43%
Macon, GA	0.36%
Fayetteville, NC	0.36%
Cape Coral, FL	0.35%
Cleveland, OH	0.33%
Jacksonville, FL	0.31%
Ocala, FL	0.31%
Jacksonville, NC	0.31%

Five of the top ten sit in Florida. That clustering is not random. Florida pairs some of the steepest insurance increases in the country with escrow costs up more than 70% since 2019, and the combination hits owners exactly where I described earlier.

What Does Rising Foreclosure Activity Mean for Real Estate Investors?

For investors, rising foreclosure activity means more distressed inventory is forming, but the opportunity sits earlier in the process than most people look, and it varies enormously by state. If you source distressed deals, the composition of the increase matters far more than the headline. Here is how I read it.

Watch Starts, Not Repossessions

Foreclosure starts jumped 18% while completed repossessions, though up in percentage terms, remain a small slice of the pipeline (ATTOM, 2026).

Starts are the number I care about. A start means an owner just entered the pre-foreclosure stage, which is the window where a conversation can still go somewhere. Once a home hits the auction or lands in a bank’s REO inventory, your options narrow and your competition changes. The gap between a start and a completion is where deals actually happen, so knowing the difference between pre-foreclosure and foreclosure is not academic, it is the whole timing of your outreach.

The Pipeline Is Filling Faster Than It Empties

Look at the raw counts, not the rates. In the first half of 2026, 164,566 properties started the process and lenders completed just 27,983 (ATTOM, 2026). Roughly six properties entered for every one that finished. That backlog is a forward supply signal. Distress that lands in the pipeline today shows up as properties moving through foreclosure for months and sometimes years afterward, which means the deal flow forming now will keep arriving well past the point when the headlines move on.

State Timelines Change Your Whole Strategy

How long a foreclosure takes depends almost entirely on the state, and it swings wildly. A home foreclosed in Texas averaged 155 days in the process. In Louisiana, it averaged 3,491 days, in Hawaii 2,293, and in New York 2,007 (ATTOM, 2026).

Fastest States (Avg Days)	Slowest States (Avg Days)
Texas — 155	Louisiana — 3,491
New Hampshire — 157	Hawaii — 2,293
Wyoming — 173	New York — 2,007
West Virginia — 196	Connecticut — 1,626
Alaska — 199	Nevada — 1,507

That spread changes how you work.

In a fast state like Texas, you have weeks, not months, so speed and a ready offer win. In a slow judicial state, you have a long runway to find the owner, build trust, and structure something before the auction ever arrives. Same national trend, completely different playbook depending on where the property sits.

How to Reach These Owners

Finding a pre-foreclosure owner is one thing. Getting them to talk to you is another. These are people under real financial stress who have been getting hammered with mail and calls from every investor in the county, so the approach has to lead with something other than “I want to buy your house.”

What you say when you reach a pre-foreclosure owner decides whether you get a conversation or a hang-up, and it is worth having a real script rather than winging it.

Final Thoughts on Foreclosure Trends

The rise in foreclosures is real, and so is the opportunity. The increase concentrates in FHA borrowers, in the 2022 and 2023 buyer cohort, in specific states, and in the earliest stage of the pipeline. Investors who read the composition of that number will find deals. Investors who just see “foreclosures up 21%” and expect 2008 will either sit out a real opportunity or overpay chasing a crash that is not coming.

If you would rather work verified foreclosure and pre-foreclosure opportunities than pull county records yourself, that is exactly what our foreclosure leads are built for.

References

1. ATTOM, 2026. Foreclosure Activity Posts Annual Increase in First Half of 2026 (Mid-Year 2026 U.S. Foreclosure Market Report).
2. Mortgage Bankers Association, 2026. Mortgage Delinquencies Increase in the First Quarter of 2026.
3. Cotality, 2026. April 2026 Property Market Report (escrow shortage findings).
4. Insurify, 2026. 2026 Insuring the American Homeowner Report.