T
he US housing market sent mixed signals in May 2025, with foreclosure activity dipping slightly from the previous month but rising significantly compared to a year ago. According to ATTOM's Foreclosure Market Report, 35,498 properties were hit with foreclosure filings last month, a 1% decline from April but a 9% increase from May 2024.

    Foreclosure starts dropped to 24,165, a 4% decrease from the prior month, but still 8% higher than one year ago. The states with the most foreclosure starts included Texas (3,077 filings), Florida (2,780), and California (2,641). Illinois and New York rounded out the top five.

    However, completed foreclosures jumped 7% from April and soared 34% from last year, with lenders repossessing 3,844 properties nationwide. Texas saw the highest volume of REOs, followed by California, Pennsylvania, Michigan, and Florida.

    Regionally, some states and cities had unusually high foreclosure rates. Delaware had the highest rate in the country, with one in every 2,313 homes facing foreclosure. Florida and Illinois followed closely behind, along with Nevada and Indiana.

    Several metro areas experienced concentrated foreclosure activity, with Florida cities dominating the list. Lakeland registered the highest metro foreclosure rate in the nation, while California cities like Bakersfield and Riverside also posted elevated rates.

    Larger metropolitan areas saw foreclosure pressures rise, with Jacksonville, Riverside, Cleveland, San Antonio, and Chicago among the hardest hit. New York City recorded the highest number of foreclosure starts for any metro, followed by Chicago, Houston, Los Angeles, and Miami.

    Experts caution that while the foreclosure landscape hasn't returned to crisis levels, the steady rise in completed foreclosures signals lenders may be quietly clearing out a backlog of distressed properties. The US housing market appears to be walking a fine line, with softening in some areas but still pockets of vulnerability in others.