U.S. Foreclosure Rates Rise in 2025: Key States, Causes, and What It Means for Buyers

Foreclosure activity in the United States has increased for eight consecutive months as of October 2025, with starts up nearly 20% and completed foreclosures up 32% year-over-year. However, experts emphasize these rates remain well below historic highs, signaling a market correction rather than a crisis. Florida leads the nation with the highest foreclosure rate, driven by soaring insurance costs and HOA fees, particularly impacting retirees on fixed incomes.

What Do the Current U.S. Foreclosure Statistics Show?

According to the latest data from ATTOM, a real estate analytics firm, 1 in every 3,871 U.S. housing units had a foreclosure filing in October 2025. This represents a steady, eight-month upward trend. A foreclosure filing is the legal action a lender initiates when a homeowner defaults on their mortgage. It is critical to understand that while the percentage increases sound significant, the overall volume is a fraction of what was seen during the 2008 housing crisis, when 1 in 54 households received a foreclosure notice.

Why Does Florida Have the Highest Foreclosure Rate?

Florida holds the top spot, with a foreclosure rate of 1 in every 1,829 housing units. Major metropolitan areas like Tampa, Jacksonville, and Orlando are among the most affected. This concentration is attributed to a combination of unique economic pressures.

• Surging Insurance Premiums: As a hurricane-prone state, Florida has experienced a dramatic rise in homeowners insurance costs due to the increasing frequency and severity of extreme weather events.
• Rising HOA Fees: Following the Surfside condo collapse, Homeowners Association (HOA) fees have skyrocketed statewide. An HOA is an organization that makes and enforces rules for a community of properties; its fees cover maintenance of common areas.
• Fixed-Income Population: Florida's large retiree population, which often lives on fixed incomes, is particularly vulnerable to these escalating costs. When essential fees outpace income, the risk of mortgage default increases significantly.

Which Other States Have High Foreclosure Activity?

After Florida, several other states show elevated foreclosure rates. The table below outlines the top five states as of October 2025.

Delaware's presence is notable. As a smaller market, its data can appear more volatile. Analysts suggest that recent federal employment disruptions and the high cost of living may leave homeowners with less financial cushion to weather unexpected shocks.

Is This Trend an Opportunity for Home Buyers?

For prospective buyers, higher foreclosure rates can present opportunities to purchase properties below market value. However, these transactions carry specific risks and require careful due diligence, which is the comprehensive research and investigation performed before signing a contract.

Key considerations for buying a foreclosed property include:

• Sold As-Is: These properties are typically sold in their current condition, with no warranties or repairs from the seller. A thorough home inspection is highly recommended, even if not required.
• Cash-Only Sales: Many foreclosure auctions require full payment in cash, which can limit financing options.
• Potential for Liens: Buyers may become responsible for existing liens (a legal claim against a property for unpaid debt) or back taxes. A title search is essential to uncover any hidden claims.
• Varying Discounts: Not all foreclosures are "steals." Some may offer only a modest discount from the market price, which could be offset by the cost of necessary repairs.

While the current increase in foreclosures is a concern for homeowners, it is a measured normalization from the unusually low rates seen in recent years. For buyers, foreclosures can offer value but demand a cautious, well-researched approach. The market is not facing a repeat of 2008, but it is adjusting to new economic realities, including higher costs of homeownership.