Foreclosure Filings Up 13% Year-Over-Year as Bank Repossessions Surge

Foreclosure activity climbed sharply in August 2026, with 40,277 U.S. properties carrying some form of foreclosure filing — a 1% increase from July and a 13% jump compared to August 2025, according to ATTOM's latest Foreclosure Market Report. The hardest-hit states are concentrated in the South, and the spike in completed bank repossessions — up 42% from a year ago — is the number sellers in affected markets cannot afford to ignore.

The August Numbers, Broken Down by Region

Nationally, one in every 3,569 housing units had a foreclosure filing last month. But that average masks severe regional concentrations. South Carolina posted the worst per-capita rate in the country: one filing for every 1,547 housing units. Nevada came in second at one in 1,920, followed by Florida at one in 2,397, Texas at one in 2,445, and Maryland at one in 2,530.

At the metro level, the distress is even more pronounced. Columbia, South Carolina led all major metros with one filing for every 1,232 housing units. Punta Gorda, Florida and Spartanburg, South Carolina were close behind. Fayetteville, North Carolina and Charleston, South Carolina rounded out the five most distressed large markets in the country.

On the raw volume side, Florida led all states in foreclosure starts with 3,189 new proceedings initiated in August, followed by Texas at 3,126 and California at 2,565. Illinois and Georgia each exceeded 1,100 starts. Lenders completed 5,794 repossessions nationally — a 22% monthly surge and a 42% annual increase. Texas alone accounted for 1,835 of those completed repossessions, with Houston logging 448 and Dallas adding 402.

Not every market moved in the same direction. Cleveland, Washington D.C., Providence, Raleigh, and Kansas City all recorded meaningful year-over-year declines in foreclosure starts — a reminder that this is a regionally uneven story, not a uniform national crisis.

ATTOM CEO Rob Barber noted that while activity is trending above year-ago levels, overall volumes are still well below historical norms and the broader housing market is showing resilience. That context matters — but it doesn't change the math in the markets where filings are dense.

What a 42% Spike in Completed Repossessions Actually Does to a Seller's Market

Bank-owned properties — REOs — are the category that puts the most direct pressure on sellers who are trying to sell conventionally. When lenders repossess homes and move them back onto the market, they typically price aggressively to liquidate. That creates a local comps problem: appraisers and buyers' agents use recent sales to anchor offers, and distressed sales pull those anchors down.

A 42% annual increase in completed foreclosures is not an abstraction. In Houston, Dallas, and San Antonio — which together logged more than 1,100 REO completions in a single month — conventional sellers are competing against bank-priced inventory that does not need to net a profit, cover a mortgage payoff, or leave room for the seller's next down payment. That is a structurally different competitor than another homeowner.

In South Carolina's hardest-hit markets, the density of filings at every stage of the process — notices of default, scheduled auctions, and completed repossessions — means the pipeline of distressed inventory will keep refilling for months. Sellers who wait, expecting conditions to stabilize on their own, may find the local comps continuing to soften as that pipeline clears.

How Sellers in High-Foreclosure Markets Should Adjust Their Strategy Now

The first step is understanding whether your specific ZIP code is absorbing distressed inventory or insulated from it. Statewide rates are a starting point, but two neighborhoods in the same metro can have wildly different foreclosure concentrations. Pull recent sold comps and filter specifically for bank-owned and auction sales to see how much of the recent price history in your area is being set by distressed sellers rather than conventional ones.

Pricing discipline matters more in these markets than in stable ones. Overpricing in a market where buyers can point to nearby REO comps gives them leverage to negotiate aggressively or simply wait for a bank-owned alternative. Sellers who price precisely — not optimistically — tend to close faster and closer to list in distressed environments.

Timing is also worth examining carefully. Properties in the notice-of-default and scheduled-auction stages haven't hit the market yet, but they will. In the highest-rate metros, the volume of properties currently in those earlier pipeline stages suggests the peak REO supply may still be ahead, not behind. Sellers with flexibility on timing should get a clear read on local inventory trends before deciding whether moving sooner or later makes more strategic sense.

For sellers who want a guaranteed exit price regardless of what the local distressed inventory does to comps, an instant offer comparison is worth running. It won't be right for everyone, but in markets where REO competition is real, knowing your floor has value.

Where the Market Is Holding Steady — and Why That Matters

It's worth being direct about what this data does not say. Foreclosure filings at 40,277 per month nationally are elevated compared to recent years, but they remain a fraction of what the country processed during the 2008–2012 cycle. The markets showing year-over-year declines — Cleveland, the D.C. metro, Providence, Raleigh, Kansas City — demonstrate that local economic conditions, employment stability, and prior inventory levels all shape outcomes independently of the national trend.

Sellers in those cooling-distress markets are in a meaningfully different position than sellers in Columbia, South Carolina or Punta Gorda, Florida right now. The national headline is real, but your local number is the one that determines your sale price. Know which category your market falls into before you set a list price or a timeline.