U.S. Foreclosure Filings Rise to Nearly 40,000 in July

Nearly 40,000 U.S. properties entered some stage of foreclosure in July, up 10% from a year earlier, as elevated mortgage rates, high monthly payments and weakening housing demand continue to pressure some homeowners.

By yourNEWS Media Newsroom

Foreclosure activity across the United States increased again in July, extending a broader 2026 rise as some homeowners struggle with elevated borrowing costs and monthly mortgage payments.

A total of 39,906 U.S. properties received a foreclosure filing during the month, according to an Aug. 27 report from real estate analytics company ATTOM.

That represented a 1% increase from June and a 10% increase from July 2025.

Nationwide, one in every 3,603 housing units had a foreclosure filing in July.

Nevada recorded the highest foreclosure rate among the states, followed by South Carolina, Florida, Delaware and Texas.

The numbers reflect a continuation of the upward trend seen during the first half of 2026, when foreclosure filings increased 21% compared with the same six-month period a year earlier.

ATTOM nevertheless said foreclosure volumes remain well below levels associated with previous periods of severe housing-market distress.

“The increase in foreclosure starts and completed foreclosures compared to last year shows that financial pressures remain a factor for some homeowners,” ATTOM CEO Rob Barber said.

“However, the broader context is important. Foreclosure activity remains relatively low by historical standards. While annual increases have become more common, current volumes indicate that the market remains relatively resilient overall.”

Both foreclosure starts and completed foreclosures increased from a year earlier in July.

Among metropolitan areas with at least 200,000 residents, Punta Gorda, Florida, posted the highest foreclosure rate in the country.

One in every 899 housing units there received a foreclosure filing.

Killeen, Texas, had the second-highest rate, followed by Las Vegas, Nevada; Vallejo, California; and Lakeland, Florida.

The increase is occurring against a housing backdrop in which mortgage borrowing costs have remained substantially higher than the levels many Americans became accustomed to before 2022.

The average rate for a 30-year fixed mortgage has remained at or above 6% almost continuously since September 2022, according to Freddie Mac data.

The only exception was a brief decline below that level in late February 2026.

Those rates have affected both prospective buyers and households that purchased homes during the higher-rate environment and hoped to refinance later.

A July report from financial services company Truework found that many Americans who bought homes within the previous two years are relying on the expectation that refinancing will eventually lower their payments.

The report was based on a survey of 1,000 Americans who had purchased homes during the previous 24 months.

Among buyers carrying mortgages, 85% said refinancing within the next three years was important to their financial health.

That was a sharp increase from 56% who gave the same response in Truework’s 2025 survey.

Half of mortgage holders surveyed said their loans would become financially unsustainable if interest rates did not decline.

Another 40% said they would need to take a second job if they were unable to refinance within three years.

Nearly nine in 10 respondents said an ordinary financial setback could jeopardize their ability to make their monthly mortgage payment.

Truework said many buyers purchased homes while mortgage rates were between 6% and 7% and did not expect either those borrowing costs or their resulting monthly payments to remain elevated for an extended period.

The company described the situation as “Conditional Affordability.”

“We’re calling this ‘Conditional Affordability’: a payment that works today, but only through continued financial sacrifice, and long-term finances that depend, at least in part, on a future rate drop,” the report said.

“How much a buyer’s finances depend on rates falling often predicts financial strain better than income, age, or first-time buyer status, making rate expectations a signal worth watching even for buyers who look financially secure on paper.”

The findings suggest that some recent homeowners may be financially stable only as long as their employment, income and other household expenses remain favorable.

If mortgage rates stay elevated and financial setbacks occur, the number of homeowners experiencing serious payment difficulties could increase.

That pressure is emerging at the same time that selling a home has become more difficult in parts of the country.

An Aug. 27 report from real estate brokerage Redfin found that housing demand is declining as potential buyers remain reluctant to enter the market.

High home prices and mortgage rates have pushed some prospective purchasers to the sidelines.

Others are waiting to see whether borrowing costs fall during the coming months, while economic uncertainty is keeping additional buyers from making offers.

For homeowners already under financial pressure, weaker demand can reduce the ability to quickly sell a property at a favorable price before mortgage problems become more serious.

A softer market can also give buyers greater negotiating power, particularly when homes remain listed for extended periods.

Redfin head of economics research Chen Zhao said sellers should avoid assuming their property will command the same price nearby homes received during stronger market conditions.

“Sellers should resist the urge to price based on what a neighbor got a year or two ago: Pricing a home correctly from the start can be the difference between attracting a serious buyer and lingering on the market,” Zhao said.

The combination of high mortgage payments, limited refinancing opportunities and softer demand could place additional pressure on financially stretched households.

ATTOM’s latest figures do not indicate foreclosure activity has returned to historically extreme levels, but they do show that the number of distressed properties continues moving higher year over year.

With nearly 40,000 properties receiving filings in July and foreclosure activity already up substantially during the first half of 2026, the trajectory increasingly depends on whether mortgage rates ease, household finances remain stable and housing demand improves.