Foreclosures rise in Q1 as homeowners feel the squeeze

Foreclosure filings surged to start the year, with economic uncertainty and the expiration of previous moratoriums weighing on homeowners' minds. 

Foreclosure filings appeared on 93,953 U.S. properties in the first quarter of 2025, spiking 11.4% from 84,361 three months earlier, according to real estate data provider Attom. The latest number slid 1.5% on a year-over-year basis from 95,349 and represented one in every 1,515 properties in the U.S.

"Following three consecutive quarters of decline, foreclosure activity ticked up in the first quarter of 2025, with notable growth in both starts and completions," said Attom CEO Rob Barber in a press release. 

"While levels remain below historical averages, the quarterly growth suggests that some homeowners may be starting to feel the pressure of ongoing economic challenges. However, strong home equity positions in many markets continue to help buffer against a more significant spike in distress," he continued.

Monthly numbers also showed a rapid upward trend, with 35,890 notices on U.S. properties in March, up 10.8% from 32,383 in February.

While overall numbers are not raising alarms, Attom's report is the latest from housing research groups that signal homebuyer distress increasing since late last year. 

The recent expiration of a foreclosure ban for borrowers enrolled in a Department of Veterans Affairs loss-mitigation program was a likely contributor to rising numbers during the first quarter. Last week, the VA announced it would also cease accepting new enrollees as of later this spring, driving concerns of higher foreclosure numbers to come later this year. 

Foreclosure starts numbered 68,794 in the first quarter, accelerating by approximately 11% from the prior three months and 2% annually. 

Meanwhile, bank repossessions headed up by 8% quarter over quarter to 9,691 units, but the total decreased 4% from one year earlier.

The average amount of time taken to foreclose narrowed to an average of 671 days, down 12% from the previous quarter and 9% annually. The average completed foreclosure length has continually shortened since mid 2020.

Delaware led all states with the highest rate of foreclosure filings at one in 761 units. It was followed by Illinois at one in 857 properties and Nevada at one in 874.