Foreclosures Spike in October - Concerning?

According to CNBC, foreclosure filings are increasing in the US. Our summary and thoughts below. 

CNBC Article 

After years of unusually low foreclosure activity, new data show that U.S. homeowners are beginning to feel strain — and the housing market may be showing fresh signs of distress.

Key Takeaways

• U.S. foreclosure filings surged by about 20 % year-over-year in October 2025, according to property-data provider ATTOM. 

• While still far below the levels seen during the 2008 financial crisis, this uptick signals borrower stress is rising. 

• Areas hit hardest include states where home-values have pulled back and cost burdens are rising — particularly in parts of Florida and Texas. 

What’s Driving the Rise?

• High mortgage rates (the 30-year fixed rate remains above 6 %) make refinancing or moving more expensive for many homeowners. 

• Inflation, rising homeowner-insurance premiums, high property taxes and other cost pressures are squeezing household budgets. 

• Earlier-buyers in high-cost markets are now finding themselves in negative-equity or near-problem situations as some home-prices decline or stall. 

Why It Matters

• The housing market has been one of the more resilient parts of the U.S. economy post-COVID, but higher foreclosure activity suggests the cracks may be widening.

• For real estate investors, fund managers (including those in commercial property), and stakeholders in distressed assets, rising foreclosure activity is a signal worth monitoring — it may foreshadow broader weakness in household finances and real-estate fundamentals.

• While this isn’t yet a systemic crisis, rising defaults and foreclosures raise risk for lenders, servicers and investors in residential real estate, especially in markets with softer home-price trends.

What to Watch Going Forward

• Whether foreclosure filings continue to rise (or accelerate) in coming months as economic pressures persist.

• Regional markets where home-price declines, high unemployment, or high mortgage-rate burdens coincide — these may be hotspots for real-estate distress.

• Impact on supply: more distressed sales and foreclosed properties entering the market could weigh on prices and rental markets in some areas.

Weitz Take: 

This one pretty much speaks for itself. I would say that a 20% increase is certainly notable, but this is very market to market driven at this point. It will be interesting to see if this makes it way to your area. 

Foreclosure Filings on the Rise Nationwide

AP - Article on Nationwide increase in foreclosure filings. Key points and comment below. 

Foreclosure filings have seen an uptick, signaling potential distress for homeowners amid ongoing financial volatility.

The number of properties with foreclosure filings in January is up 5% compared to a year ago and 10% from December, according to real estate data provider ATTOM's January 2024 U.S. Foreclosure Market Report. The report shows there were a total of 33,270 foreclosure filings — default notices, scheduled auctions or bank repossessions.

"We observed a slight uptick in foreclosure filings, which may be partially attributed to the typical post-holiday progression of filings through the legal system," ATTOM CEO Rob Barber said. "However, other external factors may be at play such as escalating interest rates, inflation, employment shifts and other market dynamics. We remain vigilant in monitoring these trends to understand their full impact on foreclosure activity."

Foreclosure completions surged in 19 states. In January, lenders repossessed 3,954 properties through completed foreclosures, marking a 1% increase from the previous year and a 13% rise from December. It's the first month-over-month increase in completed foreclosures (REOs) since July.

Among the 224 regions with a population of at least 200,000, cities with the highest numbers of REOs included Detroit with 609, followed by Chicago with 194, New York City with 163, Philadelphia with 107 and San Francisco with 107.

Foreclosure rates across the United States remained concerning, with one in every 4,236 housing units experiencing a filing nationwide. Leading the pack in foreclosure rates were Delaware, where one in every 2,269 housing units faced a foreclosure filing, followed by Nevada with one in every 2,272 and Indiana with one in every 2,499.

Foreclosure initiations surged monthly and yearly as lenders started proceedings on 21,770 properties in January — a 6% increase from the previous month and a 5% rise compared to the same period a year ago.

Leading the tally of states with the highest number of foreclosure starts in January are California, which saw 2,719, followed by Texas with 2,613, Florida with 2,330, New York with 1,341 and Illinois with 763.

In major metropolitan statistical areas with populations of at least 200,000, New York led with 1,470 foreclosure initiations, trailed by Houston with 1,015, Los Angeles with 817, Miami with 804 and Chicago with 763.

Weitz Take: If you read this blog, you know I've been predicting this since rates increased dramtically and job loses (that the media hardly covers) started in the last 12-18 months. I think we are just at the tip of the ice berg on this. Buckle up. 

For help with foreclosure defense, consider contacting a Snohomish County Foreclosure attorney.