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By Giulia Carbonaro
Senior Reporter
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The number of Americans failing to pay their mortgages and facing repossession has grown in the first quarter of the year, according to a new report by the real estate and property data provider ATTOM.
With borrowing costs once again on the rise and the conflict in the Middle East casting a new shadow on the U.S. economy, a total of 118,727 properties were hit with a foreclosure filing between January and March, up 6 percent from the previous quarter and 26 percent from a year earlier.
That is the equivalent of one in every 1,211 housing units nationwide.
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"Foreclosure activity increased in the first quarter, with both starts and completed foreclosures posting solid year-over-year gains," Rob Barber, the CEO of ATTOM, said in a statement.
"While volumes remain below historical peaks, the continued rise, especially in starts and bank repossessions, suggests financial pressure may be building for some homeowners and could signal shifting housing market dynamics," he continued.
Which States Had the Worst Foreclosure Rates?
States in the Midwest and the South are bearing the brunt of this new wave of foreclosures. The worst-hit states in the first quarter of the year were Indiana, where one in every 739 housing units had a foreclosure filing; South Carolina (one in every 743 housing units); Florida (one in every 750 housing units); Delaware (one in every 757 housing units); and Illinois (one in every 833 housing units).
At the metro level, many of the cities with the worst foreclosure rates were in the South—including in two states listed above, Florida and South Carolina.
Among 227 metropolitan statistical areas with a population of at least 200,000, those with the worst foreclosure rates in the first quarter of the year, according to ATTOM, were Lakeland, Florida (one in every 409 housing units); Punta Gorda, Florida (one in 416); Columbia, South Carolina (one in 440); Fayetteville, North Carolina (one in 480); and Macon, Georgia (one in 492).
The Worst-Case Scenario
A foreclosure filing is a formal legal notice indicating that a lender has initiated the process of repossessing a mortgaged property due to nonpayment by the borrower.
It does not necessarily mean that a homeowner will lose their home. A foreclosure filing can sometimes be reversed by paying missing payments, among other solutions, even as it is widely considered an uphill battle.
But the latest ATTOM data shows that many homeowners struggling and failing to pay their mortgages are facing the worst-case scenario.
Foreclosure starts—when a lender initiates the process of seizing a property—were also on the rise, with a total of 82,631 U.S. properties having started the process in the first quarter of the year, up 7 percent from the previous quarter and up 20 percent from a year ago.
The states with the greatest number of foreclosure starts in the first quarter of the year were Texas (10,617 foreclosure starts), Florida (10,099), California (7,985), Georgia (4,356) and New York (3,886).
In the first quarter of the year, lenders repossessed more properties than the previous quarter (up 2 percent) and the previous year (up 45 percent), for a total of 14,020.
The states facing the most repossessions were Colorado, which increased from 99 in the first quarter of 2025 to 321 in the first quarter of 2026; Alabama (from 153 to 355); Washington (from 104 to 224); Oregon (from 80 to 170); and Florida (from 487 to 1,014).
The Iran War and Rising Foreclosure Rates
ATTOM figures show that March—following U.S.-Israeli joint strikes against Iran on February 28, which sparked war in the Middle East—was a particularly bad month for foreclosures.
In March alone, a total of 45,921 U.S. properties faced foreclosure filings, up 18 percent from the previous month and up 28 percent from a year ago. That means one in every 3,131 properties across the nation had a foreclosure filing.
In the same month, 30,334 homes started the foreclosure process, up 17 percent from the previous month and up 21 percent from a year earlier. Lenders completed the foreclosure process on 5,229 properties, up 28 percent from the previous month.
The states with the worst foreclosure rates in March were South Carolina, where one in every 1,996 housing units had a foreclosure filing; Indiana (one in every 2,122 housing units); Florida (one in every 2,124 housing units); Illinois (one in every 2,238 housing units); and New Jersey (one in every 2,266 housing units).
After falling below 6 percent for the first time in years in February, mortgage rates climbed for five straight weeks after the Iran war began, leaving the U.S. housing market in the same slump it faced by the end of last year, when ongoing affordability issues had significantly brought down demand. As of the week ending April 9, the nationwide average 30-year fixed mortgage rate was 6.37, according to Freddie Mac.
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