These 5 States Lead the U.S. With the Worst Foreclosure Rates

Foreclosure rates have continued their double-digit surge across the country, up 21% from last year.

"November marks the ninth straight month of year-over-year increases in foreclosure activity, underscoring a trend that has steadily taken shape throughout 2025,” says Rob Barber, CEO of ATTOM, a leading curator of land, property, and real estate data.

"Foreclosure starts were up 17% from last year and completed foreclosures rose 26%.  While these numbers show continued upward movement, overall volumes remain well below historical highs."

There were a total of 35,651 U.S. properties with foreclosure filings—default notices, scheduled auctions, or bank repossessions—down 3% from a month ago and up 21% from a year ago.

Nationwide, 1 in every 3,992 housing units had a foreclosure filing in November 2025, according to the firm's latest report.

"The data suggests the market is still normalizing as some homeowners contend with higher housing costs and shifting economic pressures," Barber says.

ATTOM’s report incorporates documents filed in all three phases of foreclosure: default and notice of default; notice of foreclosure; and real estate owned or REO properties, defined as properties that have been foreclosed on and repurchased by a bank.

Worst foreclosure states

Where you live has a giant impact on your chances of foreclosure.

States with the worst foreclosure rates were Delaware (1 in every 1,924 housing units with a foreclosure filing), South Carolina (1 in every 1,973), Nevada (1 in every 2,373), New Jersey (1 in every 2,511), and Florida (1 in every 2,565). 

Delaware took over from Florida, which had the No. 1 spot in October with 1 in every 1,829 housing units having a foreclosure filing. Rounding out the top five states with the highest foreclosure rates in October were South Carolina, Illinois, Delaware, and Nevada.

Four of the five states remain the same while merely shuffling rank—New Jersey is the only newcomer. It probably doesn't help that the state's median price tag is $550,000, well above the national median of $415,000.

"Foreclosure pressure is felt hardest in states or counties with tight budgets and lower household financial resilience. New Jersey may be more sensitive to economic headwinds, especially in areas where buyers purchased their home at higher rates," says Hannah Jones, senior economic research analyst at Realtor.com®.

As for its neighbor to the south, with the worst foreclosure rates in the country, Delaware?

"Local housing market pressures and economic stress may contribute to Delaware's rising foreclosure rate, though it is not clear what specifically is driving rates higher," explains Jones.

Carol Quattrocciochi with eXp Realty, who specializes in foreclosed properties in the state, tells Realtor.com: "The feedback I'm getting from owners is due to a few factors. The cost of everything from groceries to utilities going up, along with taxes increasing, is a big issue. A lot of people are living check to check, and when something big breaks in the house that they pay to repair, then there's no money left for [mortgage] payments.

"Honestly, once someone gets a few months behind, it is hard to catch up."

Don Ash of Alliance Realty, who represents several foreclosed properties in Delaware, says that the number of properties—currently 17—is anemic compared to the "hundreds" he had seen years ago.

During the COVID-19 pandemic, many people became real estate investors, buying up foreclosed properties and either selling them or renting them out, he says.

"They quit their jobs to do this, and now they have to keep doing it, because now it's their job," he says. He represents a four-bedroom, two-bathroom house in College Park near the University of Delaware with a $274,900 price tag.

"That's a popular area," he says. "Someone will rent that out."

Metros with the most foreclosures

In terms of metro areas with populations of 1 million or more, Philadelphia fared the worst, with 1 filing for every 1,511 housing units. 

The increase reflects a temporary spike caused by the resumption of data collection in Philadelphia, which added backlogged records and is expected to normalize in December, according to the ATTOM report.

Following Philly were Las Vegas (1 in every 2,013 housing units), Cleveland (1 in every 2,114), Orlando, FL (1 in every 2,282), and Tampa, FL (1 in every 2,362).

It's not a surprise that two Sunshine State cities take up the top five spots, nor that the state has the most foreclosure starts (2,819), followed by Texas (2,612) California (2,090), New York (1,146), and Illinois (1,075). The state has been struggling due to soaring housing costs and sinking valuations.

Explains Jones: "Many homeowners who were protected by pandemic-era forbearance or relief programs are now facing resumed payments they can’t afford in light of rising HOA and insurance costs."

Often, people will choose to walk away from a property rather than pay off an underwater mortgage. It makes little financial sense to pay off a loan for a property that is worth less than the loan.

"High mortgage rates also make refinancing out of trouble harder, leaving financially strained households with few options," adds Jones. "Additionally, slowing home price growth, climbing inventory, and longer time on the market mean fewer owners can sell quickly to avoid foreclosure."

Foreclosure completions (REOs)—where the bank repossesses the property—were also up from last month, though by an incremental 0.3%.

States that had the greatest number of REOs in November 2025 included Texas (546), California (314), Florida (311), Pennsylvania (291), and Illinois (223).

Buying a foreclosed property

While foreclosures can be a way to snag a deal, most are sold as-is (no inspection) and often won't allow conventional financing.

For example, this New Jersey listing for a three-bedroom house on Big Pine Lake in Browns Mills is only a half-hour drive to the Jersey Shore, so the $239,900 list price is a steal.

But the listing warns: "House is being sold in AS-IS condition. It needs work. Cash buyers preferred. Home inspection and termite inspection report available."

Every foreclosure story is different, but some really fire the imagination.

Take this 11,000-square-foot estate with $1,600 in monthly fees in the exclusive gated community of Long Cove Club in Hilton Head, SC, which boasts a tennis court and pool. The owner began a gut renovation that came to a sudden, mysterious stop.

The home is now being sold as is and will need a decent amount of capital to whip it into shape.

Listing agent Sabriya Scott, of Scott Realty Professionals, tells Realtor.com, "Whoever had it last, it looks like the intention was to renovate the property. A lot of work was done. The entire kitchen was taken out. But now there's just drywall everywhere."

The perfect buyer would be a contractor, flipper, or someone else who doesn't mind a big project.

But at less than $229 per square foot when the houses all around it start at $321, the renovation might be worth it for the right person.

Delaware

Median price: $484,995

South Carolina

Median price: $365,000

Nevada

Median price: $492,500

New Jersey

Median price: $550,000

Florida

Median price: $425,000