N
ew York City saw a significant increase in foreclosure rates this spring, with even some of Manhattan's most affluent neighborhoods experiencing mortgage defaults. According to PropertyShark.com, the city's overall foreclosure rate jumped 11% in the second quarter of 2025 compared to the same period last year.

    Manhattan, home to over 1.6 million people, reported a 15% year-over-year increase in new foreclosure filings this spring, with 46 cases filed. Eight of these defaults were concentrated in the high-end 10022 ZIP code, which includes Park Avenue and boasts luxury homes and upscale shops. Despite its wealth, even this area is not immune to property repossession.

    Rising interest rates, economic distress, and the end of pandemic-era protections against foreclosure are likely contributing factors to the increase in foreclosures, says Realtor.com senior economist Hannah Jones. "Old money does not guarantee liquidity," she notes, adding that high carrying costs and interest rates may be weighing on owners.

    Midtown Manhattan's real estate market has long been attractive to investors, but the rise in foreclosures could signal a softening demand for high-end rentals. Brooklyn overtook Queens as New York City's most active foreclosure market this spring, with 129 first-time filings from April to June – a 36% increase from the same period last year.

    Brooklyn's ZIP code 11236, covering Canarsie and East Flatbush, logged 17 new cases, making it the city's top foreclosure hot spot. Queens registered 128 foreclosures during the second quarter, down 20% year over year.

    The Bronx saw a staggering 73% increase in foreclosures on an annual basis, surpassing its five-year record. Staten Island reported 48 foreclosure filings this spring, up 25% from the same period last year. Two-family homes drove the city's overall foreclosure activity, accounting for a third of all cases filed across New York City from April through June.