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The American housing market has been flashing warning signs for a year straight.
Foreclosure filings rose for a 12th consecutive month and 20% year over year in February 2026, according to ATTOM, a real estate analytics curator that analyzes property data. Last month alone, 38,840 properties carried a foreclosure filing, involving a default notice, a scheduled auction, or a completed bank repossession. The math works out to one in every 3,701 housing units nationally.
The headline number is striking, but context matters. The data reflects a gradual normalization after the historically suppressed foreclosure activity of the pandemic era, when federal moratoriums and forbearance programs kept filings artificially low, ATTOM CEO Rob Barber told Realtor.com. Even with the sustained climb, overall levels remain below long-run historical norms.
The national figure also obscures the stark geographic unevenness of the distress. Midwestern and Southern states are absorbing the bulk of the pressure, with individual state rates diverging sharply from the national average. Indiana’s foreclosure rate, for instance, is now double the U.S. figure — a gap wide enough to raise serious questions about local economic conditions, pandemic-era buying decisions, and the structural affordability challenges that have since emerged.
Realtor.com’s analysis of ATTOM’s Foreclosure Market Report tracks where distressed inventory is rising fastest. But buyer beware: Foreclosed properties are sold as-is, often carrying deferred maintenance, aging systems, or back-tax liens. In competitive markets, new construction can ultimately be the more affordable option, as builders frequently offer mortgage rate buydowns and cover closing costs.
Here are the 10 states with the highest foreclosure rates in February 2026, ranked from worst to least severe.
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