Foreclosure Trends in Q1 2025: An Overview

Increase in Foreclosure Activity

In the first quarter of 2025, a notable uptick in foreclosure activity was observed, reversing a trend of three consecutive quarters of decline. According to experts, this increase in both foreclosure starts and completions suggests that some homeowners might be experiencing mounting financial pressure due to ongoing economic challenges. Despite this rise, current levels of foreclosure activity remain below historical averages.

Barber stated that strong home equity positions in many markets continue to act as a buffer, mitigating the impact and preventing a more severe rise in foreclosure rates.

Foreclosure Starts by the Numbers

During the first quarter, there were 68,794 new foreclosure starts, marking a 14% increase from the previous quarter and a 2% increase compared to the same period last year. The states that experienced the highest year-over-year growth in foreclosure starts included:

• Kansas: 117%
• Delaware: 58%
• Oklahoma: 45%
• Utah: 42%
• Wyoming: 33%

Metropolitan Foreclosure Trends

Among metropolitan areas with populations exceeding 200,000, Chicago had the most foreclosure starts at 3,789, followed by:

• New York: 3,566
• Houston: 3,046
• Miami: 2,028
• Philadelphia: 1,985

National Filings and State Rates

Nationally, one in every 1,515 housing units received a foreclosure filing during the first quarter. The states with the highest rates of foreclosure activity were:

• Delaware: 1 in 761 units
• Illinois: 1 in 857
• Nevada: 1 in 874
• Indiana: 1 in 976
• South Carolina: 1 in 1,021

In metro areas, Columbia, South Carolina, recorded the highest foreclosure rate at one in 683, with Lakeland, Florida, and Bakersfield, California, following closely behind.

Trends in Bank Repossessions

In the same quarter, lenders completed repossessions on 9,691 properties, which was an 8% rise compared to the previous quarter but a 4% decrease from a year earlier. The states with the highest number of repossessions were:

• California: 944 REOs
• Texas: 938
• Illinois: 712
• Pennsylvania: 711
• Michigan: 665

The average time it took to complete a foreclosure fell to 671 days, representing a 12% decrease from the last quarter and a 9% drop year-over-year. Louisiana had the longest average foreclosure timeline, exceeding 3,000 days, while New Hampshire recorded the shortest at just 110 days.

Monthly Foreclosure Snapshot

March 2025 reported 35,890 properties with foreclosure filings, reflecting an 11% increase from February and a 9% rise year-over-year. The national rate for that month was one in every 3,965 housing units receiving a filing.

States with the most significant monthly filing rates included:

• Delaware: 1 in 2,256
• Nevada: 1 in 2,274
• Illinois: 1 in 2,484
• Indiana: 1 in 2,505
• Connecticut: 1 in 2,616

Foreclosure starts skyrocketed to 25,070 in March, up by 10% from February. Additionally, completed foreclosures surged by 22% month-over-month, indicating a critical shift as 3,687 homes were repossessed by lenders.

Looking Ahead

While these increases in foreclosure activity are notable, ATTOM points out that overall levels remain significantly lower than those seen before the pandemic. However, ongoing economic uncertainty could result in more borrowers facing distress as the year progresses.