Real Estate Intelligence

August 19, 2026

For the last few years, one word has been strangely absent from most real estate conversations:

Foreclosure.

Homeowners built enormous amounts of equity.

Mortgage rates locked millions of borrowers into ultra-low payments.

And even when people ran into financial trouble, many could simply sell the house instead of losing it to the bank.

That environment is beginning to change.

Foreclosure activity across the United States is rising again.

And while we are nowhere near another 2008-style foreclosure crisis, the numbers are becoming significant enough that real estate investors should be paying attention.

According to ATTOM, 227,548 U.S. properties had a foreclosure filing during the first six months of 2026.

That includes default notices, scheduled auctions, and bank repossessions.

That number was 21% higher than the first half of 2025 and 28% higher than the same period two years ago.

That is not a housing crash.

But it is a trend.

And trends create opportunities for investors who understand what is happening before everybody else does.

Foreclosure Stats Are Rising Even Faster

The number I am watching most closely isn't completed foreclosures.

It's foreclosure starts.

During the first half of 2026, 164,566 properties entered the foreclosure process.

That's an 18% increase from a year earlier.

June continued that trend.

More than 26,000 properties entered foreclosure during the month, roughly 20% more than June 2025.

That matters because foreclosure starts tell us something about financial pressure happening right now.

Completed foreclosures tell us what happened months or sometimes years ago.

Starts give us an earlier look.

And right now they're moving higher.

Why Is This Happening?

There isn't one single cause.

It is several pressures hitting homeowners at the same time.

Mortgage rates remain high compared with the ultra-low-rate period following COVID.

Property taxes have increased in many markets.

Homeowners insurance has become dramatically more expensive in parts of the country.

Maintenance and repair costs are higher.

Consumer debt has increased.

And the basic cost of owning a home has become much more expensive.

A homeowner may have purchased the property several years ago with an affordable mortgage payment.

But that doesn't mean the rest of their household expenses stayed affordable.

Taxes go up.

Insurance goes up.

Utilities go up.

Credit card payments go up.

Eventually something breaks.

Mortgage data is beginning to show some of that pressure.

The Mortgage Bankers Association reported that 4.37% of residential mortgages were delinquent at the end of the second quarter of 2026.

That was slightly lower than the previous quarter, but 44 basis points higher than one year earlier.

More importantly, seriously delinquent loans increased for the fourth consecutive quarter.

That is the number investors should watch.

Some Markets Are Feeling It Much More Than Others

Foreclosures are not rising evenly across America.

During the first half of 2026, the largest year-over-year increases in foreclosure activity occurred in:

Idaho: +59%
Colorado: +57%
Georgia: +52%
North Carolina: +47%
Mississippi: +45%

But the states with the highest overall foreclosure rates were different.

Florida had the highest rate among major states, with approximately 0.27% of housing units receiving a foreclosure filing during the first half of the year.

South Carolina followed at 0.26%, while Indiana and Delaware were both around 0.25%.

Several Florida markets stand out even more.

Punta Gorda recorded foreclosure filings on approximately 0.50% of housing units during the first half of 2026.

Lakeland was close behind at 0.48%.

Columbia, South Carolina reached 0.43%.

Those aren't insignificant numbers.

And they tell us something important.

There isn't really one national housing market anymore.

There are hundreds of local markets moving in very different directions.

Florida Is Especially Interesting

Florida keeps appearing near the top of foreclosure rankings.

That doesn't automatically mean Florida real estate is collapsing.

But homeowners there have been hit by a combination of pressures that many other states haven't experienced to the same degree.

Insurance costs have exploded.

Property taxes have climbed.

HOA and condominium assessments have increased.

Some markets experienced enormous home-price appreciation during the pandemic.

And inventory has risen considerably from the extreme shortages of several years ago.

Put those things together and distressed homeowners have fewer escape routes than they once did.

A few years ago, someone struggling financially might list their house on Friday and have multiple offers by Sunday.

That's not the market everywhere anymore.

If the home sits...

And the seller can't reduce the price enough...

And the mortgage, taxes, insurance and other bills keep coming...

Foreclosure becomes more likely.

But This Is NOT 2008

This distinction is important.

Seeing foreclosure activity rise does not automatically mean another housing collapse is around the corner.

The 2008 housing crisis involved massive amounts of bad lending, highly leveraged homeowners, collapsing property values, widespread negative equity and a banking system loaded with toxic mortgage debt.

Today's market is very different.

Millions of homeowners still have substantial equity.

Millions also have fixed-rate mortgages at rates far below today's market.

And despite the increase in foreclosure activity, the percentage of American homes actually entering foreclosure remains relatively small.

During the first half of 2026, approximately one out of every 632 U.S. housing units had some type of foreclosure filing.

So I wouldn't look at these numbers and say:

"Here comes another 2008."

I would say:

"Distress is slowly coming back into the market."

Those are two very different things.

Why This Matters For Investors

For investors, increasing foreclosure activity can create opportunities long before properties ever become bank-owned.

Remember...

Foreclosure is a process.

There is usually a long period between the homeowner first missing payments and the lender eventually taking possession.

That period can create motivated sellers.

Some homeowners have equity but need speed.

Others inherited additional financial problems and simply want out.

Some need creative financing.

Some need someone to take over a difficult property.

Others just need a buyer who understands how to solve the problem before the foreclosure goes any further.

That's where investors can create value.

The opportunity isn't necessarily buying REOs from banks.

The bigger opportunity may happen before the bank ever owns the property.

Foreclosure Timelines Are Also Getting Shorter

Another interesting change is happening behind the scenes.

Properties that completed foreclosure during the second quarter of 2026 spent an average of 563 days in the foreclosure process.

That was the shortest average timeline ATTOM has reported since 2013 and approximately 13% shorter than one year earlier.

Some states move dramatically faster.

Texas averaged only 155 days.

New Hampshire averaged 157 days.

Wyoming averaged 173 days.

That matters.

If you're marketing to distressed property owners, the window to solve their problem may be getting smaller.

Investors who wait until the property is days away from auction may already be too late.

My Take

I actually think the foreclosure numbers are another example of why the next few years could produce more opportunity for real estate investors than the last few.

Not because I want homeowners to struggle.

Nobody should.

But real estate investors make money by solving problems.

And for several years there weren't very many problems to solve.

Inventory was incredibly tight.

Equity was enormous.

Properties sold immediately.

Cheap money covered up a lot of mistakes.

Now the market is becoming more complicated.

And complicated markets reward knowledgeable investors.

You're going to have homeowners dealing with:

higher insurance...

higher taxes...

consumer debt...

job changes...

unaffordable repairs...

slower home sales...

and increasing foreclosure pressure.

At the same time, many of these homeowners will still have equity.

That's a completely different opportunity than 2008.

In 2008, millions of distressed sellers owed more than their houses were worth.

In today's market, many distressed owners may still be sitting on significant equity.

That means there could be room to create solutions where:

the homeowner gets out of a bad situation...

the lender gets paid...

and the investor acquires a property at a price that still makes sense.

That's a much healthier opportunity.

The Number I'd Watch Next

Foreclosure filings themselves matter.

But I'd pay even closer attention to serious mortgage delinquencies.

Those are the homeowners moving closer to the foreclosure pipeline.

If serious delinquencies continue rising through the end of 2026...

Foreclosure activity could remain elevated well into 2027.

If they begin falling...

This may simply turn out to be a normalization after several unusually low years.

Nobody knows yet.

But that's exactly why we're watching it.

The best investors aren't trying to predict every market move perfectly.

They're watching where pressure is building.

Because pressure eventually creates motivation.

And motivation creates deals.