Foreclosure filings rose in October. Could this trend continue in 2025?

With fluctuating mortgage rates and economic pressure in the housing market, foreclosure activity ramped up in October 2024. According to real estate data provider Attom, homebuyers may face more challenges heading into 2025.

Attom released its October 2024 U.S. Foreclosure Market Report on Tuesday. It showed that 30,784 properties had foreclosure filings last month. That’s up 4% from September’s total of 29,668 but down 11% from the October 2023 figure of 34,472.

“Foreclosure activity remains challenging for U.S. homeowners, with starts and completed foreclosures up in October,” Attom CEO Rob Barber said in a statement. “As we approach 2024, the recent Fed rate cut, and the new administration could impact mortgage rates and market stability. While seasonal factors may slow things down briefly, we’ll be watching closely to see how these recent dynamics affect the market in the coming year.”

The report aggregates the total number of properties nationwide with at least one foreclosure filing. Only filings listed in the Attom data warehouse in Q3 2023 were considered, although the company noted that some filings may come from Q2 2023. The report only considers homes in default, auction and real estate-owned (REO) status — i.e., those owned by a bank, government agency or another party after foreclosure.

Three states stood out with the highest foreclosure rates in October. In Nevada, one in every 2,741 homes had a filing. New Jersey (one in 3,059) and Florida (one in 3,086) were next. California (one in 3,152) and South Carolina (one in 3,272) followed closely behind. Nationally, the foreclosure rate stood at one in 4,578 homes.

The report also analyzed foreclosures among 224 metropolitan areas with 220,000 residents or more. California led the way as Vallejo, Bakersfield, Chico and Stockton had the highest foreclosure rates, followed by with Lakeland, Florida.

Among cities with more than 1 million residents, California also stood out. Riverside (one foreclosure per 1,978 homes) was tops on this list. Cleveland (one in 2,186) and Fresno, California (one in 2,247) followed close behind. Indianapolis (one in 2,293) and Las Vegas (one in 2,314) rounded out the top five.

Foreclosure starts — which refer to lenders that have started the process but have yet to repossess the home — tell the same story, albeit from another angle. California (2,915) led the pack again with the most foreclosure starts in October. Texas (2,282), Florida (2,227), New York (1,187) and Michigan (1,035) were next. There were 20,950 lender-initiated foreclosures last month, up 6% from September but down 10% from October 2023.

The report concluded with state rankings on completed foreclosures, or REO properties. In October, California, Illinois and Texas were the three states with the most completed foreclosures. Chicago, New York and Los Angeles stood out with the most REO properties among major metro areas.

California has become a recent hotspot for rising mortgage rates and some residents are either face foreclosure or relocating to other states with lower housing prices. In related news, mortgage delinquencies were also up in October, indicating a downturn as the housing market shifts into 2025.