The U.S. foreclosure market is showing renewed activity in 2026 after several years of unusually low volume. Foreclosure filings, starts, and REOs are increasing year over year, but current levels remain well below past market peaks.
For property managers, REO professionals, field service providers, asset managers, and property preservation teams, this trend is worth watching. More foreclosure activity can lead to more occupancy checks, property inspections, vacant-property monitoring, repairs, preservation tasks, and documentation needs.
This 2026 update looks at the latest foreclosure data, the states seeing the most pressure, and what property professionals should watch through the rest of the year.
Foreclosure Market Snapshot: Where Things Stand in 2026
Foreclosure activity increased through 2025 and continued rising in early 2026. ATTOM reported 367,460 U.S. properties with foreclosure filings in 2025, up 14% from 2024 and up 3% from 2023. Still, 2025 filings were 25% below 2019 and 87% below the 2010 peak.
That is the key takeaway. The market is normalizing after several years of unusually low foreclosure activity, but current levels remain far below past crisis levels.
The first quarter of 2026 showed a stronger annual increase. ATTOM reported 118,727 U.S. properties with foreclosure filings in Q1 2026, up 6% from Q4 2025 and up 26% from Q1 2025. Foreclosure starts rose 20% year over year, and bank repossessions, or REOs, rose 45% year over year.
April 2026 continued the same pattern. ATTOM reported 42,430 properties with foreclosure filings, down 8% from March but up 18% from April 2025. Foreclosure starts increased 12% year over year, while completed foreclosures rose 42% year over year.
Foreclosure Activity Is Rising, But Still Below Pre-Pandemic Levels
The 2026 foreclosure market is best described as a gradual annual climb. Filings, starts, and REOs are increasing, but they are still well below the levels seen before the pandemic and far below the 2010 peak.
For property professionals, this distinction matters. A rising foreclosure market can create more operational work, but it does not mean every market is facing the same level of distress.
National numbers can also hide local differences. Some states and metro areas are seeing much more foreclosure pressure than others. That means property teams should look at state, county, and metro trends instead of relying only on national totals.
ATTOM’s April 2026 report also notes that foreclosure filings include default notices, scheduled auctions, and bank repossessions. This matters because a foreclosure filing does not always mean the property has become REO or vacant.
Foreclosure Starts and REOs Are Increasing
Foreclosure starts are important because they show new properties entering the foreclosure process. In Q1 2026, 82,631 U.S. properties started foreclosure, up 20% from a year earlier. The states with the highest number of starts were Texas, Florida, California, Georgia, and New York.
REOs are important for property preservation and field service teams because they often create direct operational needs. A bank-owned property may need occupancy verification, securing, debris removal, lawn care, winterization, inspections, repairs, or code violation response.
In Q1 2026, lenders repossessed 14,020 U.S. properties through foreclosure, up 45% from a year earlier. In April alone, lenders repossessed 5,098 properties, up 42% from April 2025.
That annual increase does not mean every REO market is surging. It does mean REO teams and vendors should be ready for more assignments in the markets where foreclosure volume is rising.
States and Markets Seeing the Highest Foreclosure Rates
Foreclosure pressure is not evenly spread across the country.
In Q1 2026, the highest foreclosure rates were in Indiana, South Carolina, Florida, Delaware, and Illinois. ATTOM reported that nationwide, one in every 1,211 housing units had a foreclosure filing during the quarter.
At the metro level, Q1 2026 pressure was especially visible in several markets. ATTOM listed Lakeland, Florida; Punta Gorda, Florida; Columbia, South Carolina; Fayetteville, North Carolina; and Macon, Georgia among the metro areas with the highest foreclosure rates.
April 2026 showed a similar state pattern. The highest foreclosure rates were in Delaware, South Carolina, Florida, Indiana, and Illinois. Among larger metro areas, ATTOM reported the highest April foreclosure rates in Lakeland, Florida; Columbia, South Carolina; Charleston, South Carolina; Bakersfield, California; and Cape Coral, Florida.
For property managers and field service providers, these local patterns matter more than the national headline. A vendor network may need more coverage in one state while another market stays quiet.
Mortgage Delinquencies: Early Warning Signs to Watch
Foreclosures usually follow borrower stress, so delinquency trends are an important early warning signal.
The Mortgage Bankers Association reported that the delinquency rate for mortgage loans on one-to-four-unit residential properties rose to 4.26% at the end of Q4 2025. That was up 27 basis points from the previous quarter and 28 basis points from a year earlier.
FHA loans showed more stress than conventional loans. MBA reported that the FHA delinquency rate reached 11.52% in Q4 2025, the highest level since Q2 2021. MBA also reported that the share of loans in the foreclosure process rose to 0.53%, up from the prior quarter and higher than a year earlier.
Cotality’s data showed a more stable national picture, with the U.S. mortgage delinquency rate holding at 3.2% in December 2025. But Cotality also noted that nearly half of metro areas saw an increase in overall delinquencies, serious delinquencies, and foreclosures.
This is why local monitoring is important. National delinquency numbers may look calm while certain markets show more stress.
What Is Driving the 2026 Foreclosure Trend?
There is no single cause behind the increase. The better way to view 2026 is as a mix of market normalization and borrower pressure.
Higher borrowing costs, affordability challenges, insurance costs, taxes, and uneven labor-market conditions can all create pressure for some homeowners. MBA specifically noted that Q4 2025 results may have been affected by the expiration of certain pandemic-era FHA relief options and labor-market differences.
Home price trends also matter. FHFA reported that U.S. house prices rose 1.8% from Q4 2024 to Q4 2025. Slower appreciation can reduce the cushion some owners have when they need to sell, refinance, or resolve financial distress.
At the same time, foreclosure prevention is still active. FHFA reported that Fannie Mae and Freddie Mac completed 55,028 foreclosure prevention actions in Q4 2025, bringing the total to more than 7.3 million since conservatorship began in 2008.
So the market is not only moving toward foreclosure. There are still loan modifications, payment deferrals, forbearance plans, short sales, deeds-in-lieu, and other loss mitigation efforts happening at the same time.
Why This Matters for Property Managers and REO Professionals
Rising foreclosure activity can affect the workflow around distressed and vacant properties. Even a moderate increase can create more work for teams that handle inspections, property preservation, repairs, and asset protection.
Property managers and REO professionals may need to prepare for more:
- occupancy checks
- exterior and interior inspections
- vacant property monitoring
- securing and lock changes
- emergency repairs
- lawn care and code violation response
- winterization in colder markets
- trash-outs and debris removal
- damage assessments
- repair estimates and bid approvals
The biggest impact will likely be local. A national increase does not mean every market will need more field coverage. But markets with rising starts, REOs, and delinquencies may need faster vendor response and stronger inspection schedules.
Foreclosure timelines also affect planning. ATTOM reported that properties foreclosed in Q1 2026 had been in the foreclosure process for an average of 577 days, down 14% from a year earlier. Shorter timelines can mean faster transitions from default to completed foreclosure in some markets.
How Field Service and Property Preservation Teams Should Prepare
Field service and preservation teams should focus on readiness, not panic. The market is rising, but not exploding.
Start with market coverage. Review whether your vendor network can handle work in the states and metros showing higher foreclosure rates. If you operate in Florida, South Carolina, Indiana, Delaware, Illinois, Texas, or California, monitor local foreclosure starts and REO volume closely.
Next, strengthen inspection consistency. A clear exterior and interior inspection process helps teams document occupancy, damage, access issues, safety concerns, utilities, roof condition, property systems, and repair needs.
Photo documentation should also be consistent. Every report should make it easy to understand what was found, where it was found, and what should happen next.
Repair estimates need enough detail to support decisions. That includes location, measurements, materials, urgency, trade type, access limitations, and clear photos.
Finally, watch compliance risks. Foreclosure and REO properties can attract code violations quickly if lawns, trash, unsecured openings, or exterior damage are ignored.
What to Watch Through the Rest of 2026
The most important indicators to monitor are foreclosure starts, REO completions, delinquency rates, and local foreclosure rates.
Foreclosure starts show new pipeline pressure. REOs show completed foreclosures that may require preservation or resale preparation. Delinquencies show early borrower stress before foreclosure activity appears.
Also watch FHA delinquency trends. MBA’s Q4 2025 data showed clear stress in FHA loans, especially later-stage delinquencies. If that trend continues, it may feed more foreclosure starts later in 2026.
Local home price trends also matter. In markets where prices flatten or decline, distressed owners may have less flexibility. In markets with stronger equity, owners may still be able to sell or refinance before foreclosure.
For property teams, the best approach is to track the markets where you operate, not only the national headlines.
The 2026 foreclosure market is rising, but it is still far below the levels seen during the last housing crisis. The current trend looks more like normalization mixed with localized borrower stress.
For property professionals, the main takeaway is operational. More foreclosure starts and REOs can create more demand for inspections, preservation work, maintenance coordination, vendor dispatch, repair estimates, and property condition documentation.
The best preparation is practical. Watch local data, keep inspection workflows consistent, strengthen vendor coverage, and document every property clearly. That will help property teams respond faster as foreclosure activity continues to shift through 2026.
