Foreclosure rise in 2025 signals ‘market recalibration’

U.S. foreclosure activity did rise in 2025, but the data and experts describe it as a normalization or “market recalibration” rather than the start of a 2008‑style crisis.​

What actually happened in 2025

• Around 367,460 U.S. properties had foreclosure filings in 2025, up about 14% from 2024.​

• Lenders started foreclosure on roughly 289,000 properties, also a 14% increase from the prior year.​

• Bank repossessions (completed foreclosures/REO) climbed to about 46,000, roughly 27% higher than 2024.​

Why experts call it a recalibration

• ATTOM’s CEO said the rise “indicates a gradual return to normalcy” after years of unusually low foreclosure activity driven by pandemic-era forbearance and stimulus.​

• Filings are still well below pre‑pandemic levels and about 80–90% below the peak of the last housing crisis, so the increase is mostly a move off historic lows, not a systemic collapse.​

Signs of stress vs. systemic risk

• ATTOM notes that repeated quarterly increases in starts and completions could signal emerging borrower strain in some regions, especially where affordability is tight and rates are high.​

• However, homeowners today generally have stronger equity and benefited from tighter lending standards, which reduces the risk of widespread forced selling.​

Regional and international context

• States like Florida, Texas, and some parts of California led foreclosure-rate increases, reflecting local economic and affordability issues rather than a uniform national downturn.​

• In the UK, mortgage repossessions ticked higher in 2025, but arrears remained low and industry groups emphasized levels are still significantly below long‑term averages, again consistent with normalization.​

What it means for buyers and owners

• For buyers, slightly higher foreclosure activity can create more discounted inventory in certain markets, though not enough to flip conditions into a full buyer’s market nationally.​

• For homeowners, the main risks are localized job losses and high debt costs; lenders and regulators still stress workout options, and repossession remains a last resort in both the U.S. and UK.​