ATTOM's June Report: Foreclosure Filings Dip Monthly, Climb 14% Annually

The Headline Numbers: Monthly Dip, Annual Expansion

ATTOM's latest U.S. Foreclosure Market Report, released in mid-June, confirms the pattern that has defined the 2026 distressed market: a soft monthly print sitting on top of a hardening annual uptrend. The monthly decline is noise. The year-over-year gain is the signal investors should be underwriting against.

ATTOM found a total of 40,355 U.S. properties with foreclosure filings—default notices, scheduled auctions, or bank repossessions—down 5 percent from a month ago but up 14 percent from a year ago. That works out to one out of every 3,562 housing units nationwide having a foreclosure filing.

The divergence matters for acquisition targeting. A month-over-month dip can reflect seasonal servicer processing, holiday-adjusted court calendars, or timing of document recording—not a genuine contraction in distressed supply. As ATTOM CEO Rob Barber framed it, while foreclosure activity eased from April levels, the broader trend remains one of gradual year-over-year growth.

Starts and REOs: Both Legs of the Pipeline Are Growing

The two data points that most directly govern investor deal flow—early-stage starts and back-end repossessions—both rose annually.

• Foreclosure starts: Lenders initiated the foreclosure process on 27,304 properties, down 4 percent from April but up 13 percent year-over-year. Starts feed the pre-foreclosure and auction pipeline 4–12 months out, so a 13% annual increase points to a growing early-stage inventory.
• Completed foreclosures (REOs): Lenders repossessed 4,092 properties through completed foreclosures, down 20 percent from April but up 6 percent from May 2025. The steep monthly REO drop is the sharpest of the three metrics, but the annual figure still points up.

"Foreclosure starts and completed foreclosures both increased compared to last year, reflecting ongoing pressure on some homeowners as elevated mortgage rates, rising ownership costs, and affordability constraints persist." — Rob Barber, CEO, ATTOM

Context matters on scale: despite these annual increases, overall foreclosure activity remains well below pre-pandemic levels, indicating the housing market continues to show resilience. This is a normalization story, not a crash. Investors expecting 2008-style volume are misreading the trend—but those waiting for a bottom before deploying capital are missing an expanding, buyable pipeline.

Where the Distress Is Concentrated

The geographic clustering gives acquisition teams a targeting map. On a per-household basis, the Southeast and Mid-Atlantic lead. Florida recorded the worst foreclosure rate in the country at one in every 2,110 housing units, followed by South Carolina (one in every 2,287) and Maryland (one in every 2,369), then Nevada (one in every 2,386) and Indiana (one in every 2,516).

On raw volume—which matters more for building repeatable deal flow—the large states dominate. The states with the highest number of REOs were Texas (519), California (427), Florida (340), Illinois (223), and Michigan (222). At the metro level, distress skews toward the Midwest and Sun Belt. Among metros with populations of 2 million or more, Cleveland recorded the worst foreclosure rate at one filing for every 1,524 housing units, followed by Baltimore (one in every 1,804), Tampa (one in every 1,878), Riverside, California (one in every 1,980), and Orlando (one in every 2,034).

The Contrarian Signal: Some West Coast Metros Are Cooling

Not every market is moving the same direction, and the divergences create relative-value opportunities. Among markets with at least 200,000 people and 20+ foreclosure starts, one of the largest year-over-year drops occurred in Santa Rosa, California, which fell from 93 starts in May 2025 to 21 in May 2026. Sharp declines in select West Coast markets suggest local labor or affordability dynamics are improving relative to last year—meaning investors chasing volume should weight toward Texas, Florida, and the Midwest rather than a cooling coastal California.

What This Means for Acquisition Strategy

The operative read for mid-2026: the pipeline is still filling faster than it is draining. A 13% annual rise in starts today is next year's auction and REO supply. Investors should treat the monthly dip as an entry window, not a warning. Elevated starts in Texas, Florida, and California point to growing early-stage distressed pipelines, while steady REO inflows in Midwest and Sun Belt metros signal reliable back-end inventory. Build targeting lists off starts data now to get ahead of the auction and REO waves those starts will produce.