Sun Belt residents show greatest need of servicing help

Three Sun Belt states reported the worst foreclosure rates in August at the same time national repossessions saw a significant spike, pointing to specific regions and pain points servicers will want to address.

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Nationwide, one in every 3,569 properties, representing 40,277 units, recorded a new default notice, scheduled auction or bank repossession last month, according to the latest foreclosure report from real estate data provider Attom. South Carolina came in with the worst foreclosure rate at one in 1,547 homes. Fellow Sun Belt states Nevada and Florida followed at one in 1,920 and one in 2,397 properties, respectively. 

While the three states and several of their neighbors are seeing the gains from an influx of residents over the past few years, newcomers arriving after 2022 purchased homes in a period when mortgage rates more than doubled from levels seen earlier in the decade. With rates remaining stubbornly above 6% since June 2022 and refinances opportunities scarce, upticks in borrower distress have followed. 

Three South Carolina cities were among the five markets experiencing the nation’s worst foreclosure shares, all located in the Sun Belt. The highest share was in Columbia, which reported one filing per 1,232 homes. Spartanburg saw foreclosures on one out of every 1,262 units. Charleston recorded one out of 1,501. 

Earlier this year, a report from LegalShield similarly found heightened foreclosure stress in the South, with payment pressure at its highest since 2019. Surges in required property tax and home insurance costs, rather than rates, are fueling the distress, the company said.  

How the market performed nationwide

Foreclosures last month increased 0.9% from July’s 39,906, which was equal to one in every 3,603 units, Attom found. Filings trended upward across all three types of notices. Compared to August 2025, the number jumped 12.7% from 35,697. 

“August’s data shows that foreclosure activity continues to trend above year-ago levels, particularly in completed foreclosures, which saw a notable annual increase,” Attom CEO Rob Barber said in a press release. 

Lenders completed repossessions on 5,794 homes, rising 21.6% from July’s 4,764 and 42.1% from 4,077 in  the same month in 2025. Meanwhile, new foreclosure starts clocked in at 25,894 properties last month, falling 2.8% from July’s 26,648 units. The latest number of starts headed in the opposite direction year over year, rising 6.8% from 24,254 filings. 

The three most populous Sun Belt states — Florida, Texas and California — reported the greatest number of new starts. The Sunshine State recorded 3,189 starts, with Texas not far behind at 3,126. California reported 2,565 new filings. 

Signs of improving homeowner outcomes appeared in the Midwest and East Coast, with Cleveland, Washington and Providence, Rhode Island, seeing the largest decline in starts compared to a year ago.  

Although the rise in some foreclosure numbers should raise concerns, the trend doesn’t necessarily pose a looming threat to today’s housing market, Attom explained. 

“While some homeowners are still facing financial challenges, overall foreclosure volumes remain well below historical norms and the broader housing market continues to demonstrate resilience,” Barber said.