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By Hugh Cameron
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Foreclosure activity in the U.S. is on the rise in 2025, a notable shift that begins to undo a decade of relative stability.
According to the property‑data and analytics firm ATTOM, 36,766 properties had a foreclosure filing in October, marking a three percent rise from September, a 19 percent jump over the past year, and the eighth consecutive month of annual increases.
Why It Matters
While the numbers remain low in a historic context, and experts say these pale in comparison to levels seen during the housing crisis, the increase comes amid broader signs of financial stress across the economy, including record-high household debt, rising car repossessions, and surveys revealing widespread financial pessimism.
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What To Know
In addition to filings, ATTOM found that foreclosure starts rose six percent on-month and were up 20 percent compared to 2024, while completions increased two percent in October, and 32 percent year-over-year.
ATTOM said states with the worst foreclosure rates were Florida, whose housing market has long been mired in difficulty, followed by South Carolina, Delaware and Nevada.
"Even with these increases, activity remains well below historic highs," wrote ATTOM CEO Rob Barber. "The current trend appears to reflect a gradual normalization in foreclosure volumes as market conditions adjust and some homeowners continue to navigate higher housing and borrowing costs."
Fernando Ferreira, professor of real estate, business economics and public policy at the University of Pennsylvania’s Wharton School, told Newsweek that there are currently no indications of a concerning upward trend when it comes to foreclosure rates in the U.S.
He cited ATTOM’s mid-year report which found 187,659 properties with filings in the first six months of 2025, up 5.8 percent from last year but in line with the consistently muted, post-COVID levels. By comparison, the first half of 2010 saw 1.7 million filings.
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"If the labor market changes, and unemployment increases, then we are likely to see more foreclosures," Ferreira added. "But it will not be comparable to the catastrophic foreclosure crisis of the Great Recession, mainly because [loan-to-value ratios] and locked-in mortgage rates are much lower this time around."
A main reason why foreclosures are fairly low and stable today is because most people have low-interest-rate mortgages and thus do not feel the financial pressure from high mortgage payments, which can sometimes lead to default. Moreover, the big run-up in house prices since the pandemic means that negative equity, which can lead to "strategic default" (where people walk away from a housing asset worth less than mortgage encumbrance) is uncommon.
Adam Guren, associate professor of economics at Boston University, described every foreclosure as "a human tragedy," referencing his past research which showed profound non-financial, social consequences beyond housing instability and reduced homeownership, including "elevated levels of personal trauma" as well as positive correlations with crime and divorce rates.
However, he said that 2025’s increase appears insufficient to offset the long-running trend of low foreclosure rates.
"Over the last several years, foreclosures have looked like a relatively flat line with a small blip up in the last few months that is dwarfed by the valleys we saw in 2003-2005 and in the pandemic, and the peak we saw in 2006-2013," he told Newsweek. "Based on this data, it would be hard to tell whether what we are experiencing is a wiggle or the start of something more persistent."
Guren added that it is "very hard" to determine what might be causing the recent spike.
"House prices and the state of the economy tend to covary. So it's hard to tell whether an economic dip, local declines in house prices, or some other factors are causing this."
What People Are Saying
Jan Brueckner, Distinguished Professor of Economics at the University of California, Irvine, told Newsweek: "The latest rise seems to be historically inconsequential. The current foreclosure rate is around 0.5 percent, the lowest since 2000, when the rate was around 1 percent, twice as high. The rate, of course, surged during the housing crisis, briefly going above 40 percent."
"So while foreclosures have risen a bit lately, the change pales in comparison to past experience," he added.
Professor Adam Guren told Newsweek: "In terms of the larger risk to the housing market and the economy, we are VERY far from foreclosures playing a dominant role, as they did in 2008-10."
"We do not have a huge run-up in household debt relative to inflated housing values, lenders are not making the same types of risky, low-down-payment loans we saw in the early 2000s, and broadly underwriting standards are far more conservative," he added. "That's not to say there wouldn't be a foreclosure mess if house prices fell 20 percent. But I think it will not be as acute as last time because lenders, households, and policymakers learned their lessons."
What Happens Next
"No foreclosure tsunami to worry about," Rick Sharga, CEO of real estate market intelligence firm CJ Patrick Co., told CNBC.
However, Sharga added that there remain "a few areas of concern," such as an percent increase in Federal Housing Administration delinquencies, which he said is likely to lead to more foreclosures among low- to moderate-income families and first-time buyers in 2026.
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