ATTOM’s mid-year 2026 report dropped in July with a number that is going to scare people who aren’t familiar with how the housing market actually works: 227,548 U.S. properties with foreclosure filings in the first half of this year, up 21% from a year ago and 28% from the same period in 2024. REO completions jumped 33%. The average time to complete a foreclosure fell to 563 days, the fastest pace since 2013.
Those are real numbers. But if you stop at the headline, you’re missing the actual story.
This Is the Pandemic Hangover, Not a Housing Crisis
I agree with how ATTOM is framing this, and I think it’s important to say it plainly: this is not an alarm. It’s a hangover, and it was coming.
During the pandemic, servicers and government agencies allowed homeowners to enter forbearance and stay in their homes without making mortgage payments. That was the right policy at the time. But it created a backlog of seriously delinquent loans that, under any normal set of circumstances, would have moved through the foreclosure process over the past few years. They didn’t, because the policies prevented it.
Now those cases are finally moving through the system. Servicers and agencies are doing what they should have been doing all along, processing the delinquencies that were frozen during the forbearance period. If those loans had been handled as a normal course of business over the past two or three years instead of being held in place, we wouldn’t be seeing a spike right now. We would have seen a steady flow that nobody would have blinked at.
The 21% increase isn’t a signal that the housing market is breaking down. It’s the pipeline finally clearing.
The Underlying Fundamentals Are Sound
Here’s what I want first-time buyers and prospective homeowners to understand: the underwriting fundamentals that govern who qualifies for a mortgage today are working exactly the way they should.
Foreclosures happen. They have always happened and they always will. People lose their jobs. Catastrophic medical situations arise. Life does not go according to plan, and sometimes that means a family can no longer make their mortgage payment. That is a normal and unfortunate reality of homeownership, and it shows up in the data every year.
What the current spike does not reflect is a systemic failure in lending standards. The loans moving through foreclosure right now are largely the result of a specific, identifiable historical event and the policies that followed it. They are not a sign that today’s buyers are being put into loans they cannot afford. The system is working. The hangover just needs to be dealt with so we can get back to normal activity.
Who These Headlines Are Actually Hurting
The irony is that a 21% foreclosure headline probably hits hardest on the people who are least likely to ever become part of that data.
A first-time homebuyer reading that number has no prior experience with how the housing market cycles, what a normal foreclosure rate looks like, or how a pandemic-era forbearance backlog differs from a systemic breakdown. To someone buying their first home, “foreclosures up 21%” can read like a warning that the market is about to collapse and they are about to buy at exactly the wrong moment.
That fear is understandable, but it is not warranted. The buyers most likely to end up in foreclosure are not the people with solid employment, verified income, and proper underwriting behind their loan. Letting a pandemic-era processing backlog push a qualified buyer out of the market is letting the wrong data make the right decision.
What to Watch for Regionally
The national number matters less than where you live. Foreclosure activity varies significantly by state. Idaho, Colorado, Georgia, North Carolina, and Mississippi are seeing the sharpest year-over-year increases. Florida, South Carolina, and Indiana carry the worst overall foreclosure rates in the country right now.
If you’re buying in a market with elevated activity, it’s worth understanding whether that distressed inventory is something you’ll be competing against, or whether it’s concentrated in price ranges and neighborhoods well outside your target. A local lender or real estate agent who tracks these dynamics can give you a much clearer picture than any national average.
What Buyers Should Actually Be Focused On
The more relevant question for a buyer right now is not whether foreclosures are rising nationally. It’s whether the home they want to buy is one they can actually afford when the total payment is properly calculated.
What trips buyers up is not foreclosure headlines. It’s underestimating what their monthly payment looks like once property taxes, homeowners insurance, and HOA are included. As we wrote recently, pent-up buyer demand is moving even as rates hit an 11-month high, and the buyers making that move are the ones who have worked through the full affordability math honestly before committing.
The Total Mortgage Payment and Cash to Close Calculator accounts for state-adjusted taxes and insurance so you can see your real payment before you get emotionally committed to a property. The Pre-Qualification Calculator can help you understand your actual purchase range at current rates so you are not stretching into a payment that only works under ideal conditions.
You can read more about how I approach mortgage analysis on the About page, and see real examples of how buyers have used these tools in the YMT Case Study.
If you have been following the foreclosure headlines and wondering whether now is the wrong time to buy, the data tells a different story than the headline. Buy within your means, get properly qualified, and the foreclosure spike you are reading about has nothing to do with your situation.