Foreclosures Are Rising Nationally, Here’s What Phoenix Homeowners Need to Know

By Scott Bryant | Bryant Real Estate Group
January 17th 2026

You may be seeing headlines about foreclosures rising across the country in 2025. While that sounds alarming on the surface, the reality  especially here in the Phoenix metro, is far more nuanced.

According to newly released data from real estate analytics firm ATTOM, foreclosure activity did increase last year, but it remains well below historic norms.

The National Snapshot (Context Matters)

In 2025, foreclosure filings were recorded on approximately 367,000 U.S. households, a 14% increase from 2024, yet still 25% lower than pre-pandemic levels in 2019.

Economists point out that this increase isn’t a sign of a housing collapse, it’s a return toward normalcy after years of historically low default rates following the pandemic.

Brad Case, Chief Economist for Homes.com, summed it up well:

"Mortgage defaults were extraordinarily low beginning in 2020. What we’re seeing now is not a crisis — it’s a normalization."

Where Foreclosures Are Concentrated (And Where They Aren’t)

The majority of foreclosure activity is heavily concentrated in specific states, particularly:

• Florida
• Delaware
• South Carolina
• Illinois
• Nevada

Several Florida metro areas, including Lakeland, Orlando, and Jacksonville, ranked among the highest foreclosure rates in the country. These areas experienced rapid population growth, aggressive price appreciation, and sharper price corrections than most Western markets.

What About Phoenix?

Here’s the key takeaway for Phoenix-area homeowners:

👉 Phoenix is not experiencing foreclosure pressure at levels seen in the hardest-hit markets.

While Phoenix did see significant appreciation during the post-pandemic surge, our market dynamics differ in critical ways:

• Strong long-term population growth
• Diverse employment base
• Continued housing undersupply
• Higher levels of homeowner equity compared to many Sun Belt metros

Foreclosures typically rise when homeowners lack equity. In Phoenix, even with price plateaus over the past 18–24 months, most homeowners still have substantial equity cushions, reducing the risk of forced sales.

Why Some Foreclosures Are Still Occurring

Nationwide, foreclosures are being driven by a small subset of homeowners who:

• Purchased near market peaks with minimal down payments
• Experienced income disruption
• Bought in markets where prices stalled or declined more sharply

Additionally, pandemic-era government relief programs delayed foreclosures for several years. As those protections fully sunset, some delayed defaults are now working their way through the system, a phenomenon economists refer to as “can-kicking” finally ending.

What This Means for Buyers and Sellers in Phoenix

For sellers:
This is not a distressed market. Well-priced homes continue to sell, especially in desirable neighborhoods with strong school districts and lifestyle appeal.

For buyers:
This is a strategic opportunity window. not because of widespread distress, but because inventory has normalized and negotiating leverage has improved compared to the frenzy years.

For investors:
Distressed opportunities remain limited in Phoenix, but selective foreclosure or pre-foreclosure situations may emerge — requiring local expertise to navigate properly.

Bottom Line

Foreclosures are rising nationally, but context matters.

Phoenix remains fundamentally stable, equity-rich, and resilient compared to many U.S. markets. Headlines don’t sell homes, data, strategy, and local insight do.

If you’re wondering how this trend impacts your specific neighborhood, price point, or investment strategy, that’s exactly the conversation we should be having. Call me!

Sources

• ATTOM Data Solutions – 2025 U.S. Foreclosure Report
• Homes.com, analysis and commentary by Chief Economist Brad Case
• Article by Trevor Fraser, Homes.com (January 16, 2026)