Updated on
Reviewed by Steve Rogers
Foreclosure can have serious consequences for the borrower, including damage to their credit score and eviction from their home. If the home sells for less than the amount of the loan, it can result in a deficiency judgment, further sinking the borrower into debt.
Because the consequences of foreclosure are so drastic, most people will do anything they can to avoid it, making foreclosure statistics a useful indicator of extreme financial stress.
Key Findings
- The average foreclosure rate in the US was 0.23% in 2022.
- The highest foreclosure rate in the last 20 years was in 2010, at 2.23%.
- New Jersey is the state with the highest foreclosure rate, with 1 foreclosure for every 2,271 homes.
- Cleveland metro area has the highest foreclosure rate of 0.40%, more than 316% above the national average.
- Detroit saw the highest increase (807%) in foreclosure filings compared to the previous year.
Foreclosure Rates in the United States
The US experienced 0.23% foreclosure rates in 2022. The rate appears low, but it is, in fact, higher than in 2021 (0.11%) and 2020 (0.16%)[2].
As Table 1 shows, the foreclosure rate fell sharply in 2020, which may be explained by government interventions to cushion Americans from the impact of the Covid-19 pandemic.
No such policy actions were taken during the 2007/08 Great Recession, and the foreclosure rate touched 2.23% two years after the crisis ended.
Foreclosure rate by year (2005 – 2022)
A total of 31,557 properties in the United States had foreclosure filings in January 2023. This was a 36% upsurge year-over-year. One in every 4,425 housing units had a foreclosure filing in the month, a 0.02% foreclosure filing rate[1].
Lenders foreclosed 3,896 properties during the period, a 6% jump from December 2022. Nevertheless, the number of properties owned by lenders declined by 19% compared to last year.
This disparity may be explained by a very tight real estate market with limited supply, making even less desirable properties easier to sell at the initial auction.
States With Highest Foreclosure Rate
Foreclosure rates in the US vary widely by state due to differences in local housing markets, unemployment rates, and other factors.
New Jersey’s foreclosure rate tops the nation at one foreclosure for every 2,271 homes. The state had 3,738,342 housing units in February 2023, with 1,646 going into foreclosure[3].
Maryland also reported a high foreclosure rate as of February 2023, where 1,053 housing units were foreclosed out of 2,516,341 – making it one in every 2,390 households.[3].
Foreclosure rate by State in February 2023
Foreclosure Rate by City
Cleveland metro area has the highest foreclosure rate of 0.40%, more than 316% above the national average.
Atlantic City came in second with a 0.33% foreclosure rate, followed by Jacksonville (0.31%), Chicago (0.30%), and Columbia (0.30%)[6].
Cities With the Highest Increase in Foreclosure Rate
Additionally, the majority of major metro areas in the country witnessed an annual increase in foreclosure filings during this period (first six months of 2022), ATTOM data shows. According to the analysis, 96% of metro areas with a population of at least one million people recorded the jump[6].
Annual increase in foreclosure filings, top 10 metro areas
| Metro area | Jan-Jun 2021 | Jan-Jun 2022 | % Change |
|---|---|---|---|
| Detroit-Warren-Dearborn, MI | 401 | 3,640 | 807.73 |
| Denver-Aurora-Lakewood, CO | 145 | 1,075 | 641.38 |
| Nashville-Davidson–Murfreesboro–Franklin, TN | 55 | 347 | 530.91 |
| Grand Rapids-Wyoming, MI | 50 | 256 | 412.00 |
| Oklahoma City, OK | 203 | 1,003 | 394.09 |
| Tucson, AZ | 127 | 521 | 310.24 |
| Minneapolis-St. Paul-Bloomington, MN-WI | 402 | 1,621 | 303.23 |
| San Antonio-New Braunfels, TX | 386 | 1,397 | 261.92 |
| Phoenix-Mesa-Scottsdale, AZ | 570 | 2,009 | 252.46 |
| Philadelphia-Camden-Wilmington, PA-NJ-DE-MD | 1,583 | 5,578 | 252.37 |
According to Table 4 below, the Detroit-Warren-Dearborn metro area saw the highest increase (807%) of foreclosure filings in the first six months of 2022 compared to the previous year.
The Denver-Aurora-Lakewood metro area also witnessed a surge in foreclosure filings, climbing 641% in 12 months.
Interestingly, Nashville-Davidson–Murfreesboro–Franklin metro area’s foreclosure filings were among the fewest in the first six months of 2021, but the figure shot up 531% in 2022 to 347 filings[6].
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