Foreclosures Are Rising in 2025 — But the Data Shows a Normalizing Market, Not a Crash

Foreclosures Are Rising in 2025 — But the Data Shows a Normalizing Market, Not a Crash

Recent headlines are focusing on one number: foreclosure filings increased 14% in 2025 compared to the prior year. According to the latest year-end report from ATTOM Data Solutions, there were 367,460 foreclosure filings nationwide, including default notices, scheduled auctions, and bank repossessions.

At first glance, a double-digit increase in foreclosure activity can sound alarming. But context matters — and when you zoom out, the bigger picture tells a very different story.

Foreclosures Are Still Historically Low

Even with the 14% year-over-year increase, foreclosure activity remains:

• 25% lower than 2019 (pre-pandemic levels)

• 87% lower than 2010, during the height of the housing crisis

In other words, today’s numbers are nowhere near the levels seen during the Great Recession. In fact, what we’re seeing is more consistent with a housing market that is stabilizing after several years of artificially low foreclosure activity.

During the pandemic, foreclosure moratoriums, government stimulus programs, loan forbearance options, and record-low mortgage rates dramatically reduced distressed inventory. That created historically low foreclosure numbers in 2020–2022. As those protections expired and the market normalized, activity gradually began to rise.

This increase reflects a return to traditional housing cycles — not systemic distress.

What This Means for the Housing Market

Foreclosures are a natural part of any real estate market. A healthy housing ecosystem includes a certain level of turnover, including distressed properties. The key indicators analysts watch are:

• Rapid spikes compared to long-term averages

• Surging unemployment

• Massive equity losses

• Loose lending standards

Right now, those broader warning signs are not present.

Homeowners today have significantly more equity than during the 2008 housing crash. Lending standards over the past decade have remained strict. Most borrowers have fixed-rate mortgages. And inventory levels remain relatively constrained in many markets.

That combination helps prevent widespread foreclosure waves.

What This Means for Buyers

If foreclosure activity continues to normalize, it could gradually introduce more inventory into certain markets. For buyers, that may create:

• More options

• Occasional value opportunities

• Slightly improved negotiation leverage

However, distressed inventory is still a small percentage of overall listings. This is not a flood scenario.

What This Means for Homeowners

For current homeowners, rising foreclosure headlines do not automatically translate into falling home values. With continued equity growth and steady demand, most homeowners remain in strong positions.

If financial hardship does occur, today’s homeowners have more flexibility than in past cycles, including:

• Selling with equity

• Loan modification options

• Refinancing (depending on rates and qualification)

Local Perspective: New Jersey, Pennsylvania & Florida

In markets like New Jersey, Pennsylvania, and Florida, foreclosure activity varies by county and local economic conditions. Population shifts, job growth, and regional supply constraints all play a role in how distressed inventory impacts pricing.

That’s why national data should always be interpreted alongside local trends.

The Bottom Line

Yes, foreclosure filings increased 14% in 2025. But compared to historical benchmarks, activity remains well below both pre-pandemic levels and the peaks of the last housing crisis.

This isn’t a housing crash signal — it’s a normalization signal.

If you’re wondering how current market conditions affect your buying or refinancing strategy in NJ, PA, or FL, understanding both national and local housing data is critical. The right mortgage strategy always starts with context, not headlines.