Foreclosure activity across the U.S. housing market accelerated at the start of 2026, signaling mounting financial strain for a subset of homeowners even as overall volumes remain below pre-pandemic norms.
A total of 118,727 properties recorded a foreclosure filing in the first quarter, up 6% from the prior three months and 26% from a year earlier, according to data released by ATTOM. The increase was broad-based, with both early-stage defaults and completed repossessions posting notable gains.
March activity underscored the trend. Lenders initiated or advanced foreclosure actions on 45,921 properties during the month, an 18% jump from February and a 28% rise from a year earlier.
“While levels remain below historical peaks, the continued rise–particularly in starts and bank repossessions–points to building pressure in parts of the market,” ATTOM Chief Executive Officer Rob Barber said in the report, adding that the shift could reflect changing housing market dynamics after a prolonged period of tight supply and elevated borrowing costs.
Defaults Rise, Led by Large States and Urban Centers
Foreclosure starts–a leading indicator of distress–rose to 82,631 properties in the first quarter, up 7% from the prior quarter and 20% year-over-year. The largest volumes were concentrated in high-population states, including Texas, Florida and California, followed by Georgia and New York.
At the metro level, New York City posted the highest number of foreclosure starts, trailed by Houston, Chicago, Atlanta and Dallas–highlighting persistent stress in major urban housing markets.
Nationally, one in every 1,211 housing units had a foreclosure filing during the quarter. Indiana, South Carolina and Florida recorded the highest foreclosure rates, each with roughly one filing for every 750 housing units or fewer. Smaller metropolitan areas in the Southeast–including Lakeland and Punta Gorda in Florida, as well as Columbia, South Carolina–ranked among the most distressed markets by rate.
Among larger metros with populations exceeding one million, Cleveland, Jacksonville, Indianapolis and Orlando all placed within the top 20 highest foreclosure rates nationwide.
Bank Repossessions Jump 45% From Year Ago
Lenders took back 14,020 properties through foreclosure in the first quarter, a modest 2% increase from the prior quarter but a sharp 45% surge from a year earlier. The rise in real estate owned (REO) activity suggests that a growing share of distressed properties is progressing through the pipeline to completion.
Some states posted particularly steep annual increases in repossessions, including Colorado, Alabama, Washington, Oregon and Florida–each more than doubling or nearly doubling year-over-year volumes.
Faster Processing Signals Clearing Backlog
Even as foreclosure volumes rise, the time required to complete the process continues to shrink. Properties foreclosed in the first quarter spent an average of 577 days in the pipeline, down 14% from a year earlier and marking the sixth consecutive quarterly decline.
The data points to courts and servicers continuing to work through a backlog built during pandemic-era moratoria. Still, timelines vary widely by state. Louisiana, Hawaii and New York posted the longest foreclosure durations–stretching into multiple years–while Texas, West Virginia and Alaska recorded the fastest resolutions, with timelines measured in months.
March Snapshot Shows Intensifying Activity
On a monthly basis, one in every 3,131 U.S. properties had a foreclosure filing in March. Foreclosure starts climbed to 30,334, up 17% from February and 21% from a year earlier, while completed foreclosures rose 28% month-over-month to 5,229.
States with the highest foreclosure rates in March included South Carolina, Indiana and Florida, followed by Illinois and New Jersey.
Market Implications
The uptick in foreclosure activity reflects a housing market recalibrating after years of historically low defaults fueled by record-low interest rates and aggressive forbearance programs. While today’s levels remain well below those seen during the 2008 financial crisis, the steady rise in both starts and completions suggests stress is gradually building–particularly in pockets of the Southeast and Midwest.
For investors and policymakers, the trajectory of foreclosure filings and repossessions may offer an early signal of broader shifts in housing affordability, credit conditions and household balance sheets as higher borrowing costs continue to work their way through the system.
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