Foreclosure activity is climbing again across the U.S., signaling increased pressure on homeowners grappling with rising living and ownership costs. While overall filings remain below pre-pandemic levels, recent data points to a steady and sustained uptick—creating new potential opportunities in REO.

Foreclosures Rising for Six Straight Months

According to ATTOM, foreclosure filings have now increased year-over-year for six consecutive months, up 18% from the same period in 2024. Roughly 188,000 properties received foreclosure filings through the first half of 2025, putting the nation on track to surpass the 322,000 total recorded in 2024.

The growth is broad-based, driven by households stretched thin by inflation and rising costs—from mortgage payments to insurance, utilities, and property taxes.

The Cost of Homeownership Keeps Climbing

Even homeowners current on their loans are feeling the strain of higher holding costs. Data from ICE Mortgage Technology shows that the average property insurance premium for single-family homes with a mortgage is now $2,370 annually—up nearly 70% from five years ago.

Other costs are adding up, too:

• Property taxes are climbing across many states.
• Utility and repair costs continue to rise.
• Interest rates remain elevated, making it particularly challenging for homeowners with adjustable-rate mortgages (ARMs) that are now entering reset periods.

The Economic Pressure Behind Defaults

Roughly 94% of mortgage defaults occur after an income disruption, according to The Urban Institute. That means job loss, medical expenses, or even modest financial setbacks can quickly push already tight budgets into delinquency.

With job growth slowing and consumer debt at record highs, experts caution that delinquency rates could continue to rise through the remainder of 2025—especially for lower-income households and those in high-cost markets.

What It Means for REO Professionals

While the current pace of foreclosures is not indicative of a crisis, the steady upward trend suggests a growing pool of potential REO inventory in the months ahead.

For agents and brokers in the REO space, this shift underscores three key points:

1. Timelines Could Tighten: As filings increase, servicers will seek experienced agents who can efficiently and compliantly move assets.
2. Regional Monitoring Matters: Rising costs affect markets differently; tracking local filings and delinquency data will be critical for anticipating where inventory may surface.
3. Preparation Equals Opportunity: Building and maintaining relationships with servicers now ensures visibility when assets transition into REO.

The trendline is clear: ownership costs are testing homeowner resilience, and the early signs of stress are beginning to surface. For REO professionals, this is a call to stay informed, prepared, and positioned to capitalize on the opportunities that follow market shifts.

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Sources: CBS News, ATTOM, The Urban Institute, ICE Mortgage Technology

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