An in-depth look at the data behind the headlines and what it really means for today’s housing market

The housing market has always been a topic that attracts attention—especially when the word “foreclosure” is involved. Lately, news stories and social media posts have been buzzing with the claim that foreclosure activity is on the rise. At first glance, it’s the kind of news that makes homeowners and buyers uneasy, stirring memories of the 2008 housing crash. But if you dig deeper into the actual data behind these headlines, a more nuanced—and far less alarming—story emerges.

Let’s unpack what’s really happening in the market and why the uptick in foreclosure filings is not a sign of looming trouble.

Foreclosure Starts Have Risen—But Perspective Is Key

It’s true that foreclosure starts—the initial step in the foreclosure process—have increased by 7% during the first half of 2025. But while that percentage gain may sound dramatic in isolation, it’s crucial to understand what that number means in the context of the broader housing market.

According to property data provider ATTOM, only 0.13% of all U.S. housing units—roughly 1 in every 758 homes—had a foreclosure filing in the first six months of 2025. That’s not even close to 1%. In fact, it’s barely above a tenth of a percent. When numbers are this small, even a modest change can appear significant when expressed in percentages. This is a common trick headlines use to sound more sensational.

Now, compare that to 2010, at the peak of the foreclosure crisis, when roughly 1 in every 45 homes faced foreclosure. That equates to about 2.2%, or more than 17 times today’s rate. So while the 7% increase might look concerning on paper, in real-world terms, we are still far removed from anything resembling a housing crash.

What’s Driving the Increase?

The modest rise in foreclosure filings is not rooted in weak fundamentals, as was the case during the Great Recession. Back then, the problem stemmed from widespread subprime lending, lax credit requirements, and ballooning adjustable-rate mortgages. Many homeowners were underwater—owing more on their mortgage than their home was worth—and lacked the ability to sell, refinance, or manage their payments.

Today’s market couldn’t be more different.

1. Stronger Lending Standards

The lending practices that contributed to the last crash have been heavily regulated and reformed. Borrowers now go through more rigorous vetting, including stricter income and credit checks. Most loans in today’s market are fixed-rate with more favorable terms, reducing the risk of sudden spikes in mortgage payments.

2. Homeowner Equity Is at Record Highs

One of the biggest buffers against foreclosure today is equity. Thanks to home price appreciation over the past decade—and particularly during the pandemic boom—most homeowners have built substantial equity in their properties.

Even homeowners who fall behind on their mortgage payments have options. Instead of facing foreclosure, they can sell their home, pay off what they owe, and walk away with money in their pocket. According to Rick Sharga, Founder of CJ Patrick Company, this equity is one of the most significant reasons why foreclosure rates remain historically low:

“A significant factor contributing to today’s comparatively low levels of foreclosure activity is that homeowners—including those in foreclosure—possess an unprecedented amount of home equity.”

In short, equity provides a safety net that simply didn’t exist in 2008.

Foreclosures Vary by Region—But Still Stay Low

It’s also important to recognize that real estate is inherently local. Some regions may see slightly more foreclosure filings than others, often due to local economic conditions such as job losses, natural disasters, or other isolated hardships.

Still, even in areas experiencing increased filings, the overall numbers remain low. The national average of 1 in 758 homes facing foreclosure demonstrates how rare these situations are in 2025. Most homeowners are in a much stronger financial position, and many who face difficulties still have exit strategies that prevent them from entering foreclosure.

Why This Isn’t the Start of a Market Collapse

Given all the comparisons being made to the last housing crash, it’s understandable that people feel uneasy. But let’s put the facts side by side.

Then (2008–2010):

• Loose lending standards

• High volume of risky loans (e.g., subprime, adjustable-rate)

• Rapid decline in home prices

• Little to no homeowner equity

• Millions of underwater mortgages

• Foreclosures skyrocketed, with over 2 million filings per year

Now (2025):

• Strict lending practices

• Primarily fixed-rate, qualified mortgages

• Gradual and sustainable home price growth

• Record levels of home equity

• Low volume of underwater mortgages

• Foreclosure filings remain under 200,000 in first half of year

The fundamental difference? Homeowners today are financially healthier and have far more tools and protections at their disposal. Even amid economic uncertainty, most can weather short-term difficulties without losing their home.

What Should Homeowners Facing Hardship Do?

While the national data is encouraging, individual financial hardship is still very real. Whether due to job loss, medical bills, or other life events, some homeowners may struggle to make mortgage payments.

If you find yourself in this situation, don’t wait to fall behind before taking action. Reach out to your mortgage servicer as early as possible. There are assistance programs available—many of them designed to keep people in their homes or provide support to transition without going through foreclosure.

Some potential solutions include:

The sooner you act, the more options you’ll have.

Separating Fear from Reality

There’s a reason why dramatic headlines dominate the news cycle: fear grabs attention. But fear also clouds judgment and misleads consumers who are trying to make informed decisions about their housing future.

When evaluating housing market trends, it’s essential to look at long-term data and context rather than snapshots. A small increase in foreclosure starts doesn’t mean we’re on the brink of another crisis. Instead, it reflects a return to more typical levels of market activity as pandemic-era protections expire and some homeowners experience isolated hardship.

As always, context is everything.

What This Means for Buyers and Sellers

If you’re considering entering the market—whether buying or selling—it’s easy to be influenced by media noise. But smart decisions come from facts, not fear.

For sellers, today’s market still offers strong demand in many areas, and homeowners benefit from equity growth that can be leveraged in their next move.

For buyers, rising inventory levels may offer more choices, while steady mortgage rates give a clearer picture of affordability. The market is balancing—not crashing.

Above all, if you’re unsure how national trends impact your local area or specific situation, reach out to a qualified real estate professional. They can interpret market data in the context of your goals and help you make confident, informed decisions.

Final Thought

A 7% rise in foreclosure starts sounds newsworthy—but only if you don’t look at the whole picture. The reality is that overall foreclosure activity remains near historic lows, and the housing market is fundamentally stronger today than it was during the last crisis.

Rather than reacting to headlines designed to alarm, take time to understand the broader trends. Today’s homeowners are better positioned than ever, with more equity, more options, and more protections in place.

So, before you panic over a headline, check the facts. The data tells a far calmer, more reassuring story.

If you want a clear, honest look at how the current market affects you or your property, connect with a local real estate expert. They’ll help you navigate the numbers and give you the guidance you need to move forward confidently.