With prices climbing across various sectors, it's natural to wonder how economic shifts might affect the housing market. Some are concerned that rising costs could lead to more homeowners struggling to meet their mortgage obligations, potentially resulting in a surge of foreclosures. While recent data shows a slight increase in foreclosure filings, it’s important to view this information in the right context—because the full picture is far more optimistic than it may initially appear.

This Isn’t a Repeat of 2008

Yes, foreclosure filings saw a modest rise in the latest quarterly report from ATTOM, but they remain well below long-term averages—and significantly lower than the levels experienced during the financial crisis of 2008. When you lay the data out visually, the difference becomes even more apparent.

Take a look at Q1 2025 on the graph (right-hand side) compared to the foreclosure levels during the 2008 crash (highlighted in red). The contrast is clear: today’s housing market is in a completely different place.

The 2008 foreclosure crisis was driven by risky lending practices that left many homeowners with unaffordable mortgages. This led to widespread defaults, a glut of distressed properties, and a dramatic drop in home prices. Today, however, lending standards are far more stringent. Borrowers are better qualified, and as a result, foreclosure numbers are considerably lower.

If you're comparing recent data to 2020 and 2021, keep in mind that those years were influenced by a nationwide moratorium on foreclosures—an emergency measure that kept numbers artificially low. Using those years as a benchmark can be misleading. Instead, look at more typical periods like 2017–2019, when foreclosure activity was more stable. Compared to those years, filings today are still below average, and far below the crisis-era highs.

Understanding the Human Impact

It’s important to acknowledge that behind every foreclosure statistic is a real person or family going through a challenging time. These situations are never easy, and should never be minimized. However, from a market-wide perspective, the data doesn’t signal a looming housing disaster. In fact, the current housing environment is showing signs of stability and resilience.

Why We’re Not Seeing a Surge in Foreclosures

One major reason foreclosure rates remain low is the substantial equity homeowners have built up over the past few years. Thanks to rising home prices, many homeowners now have a solid financial cushion. Rob Barber, CEO at ATTOM, puts it this way:

“While levels remain below historical averages, the quarterly growth suggests that some homeowners may be starting to feel the pressure of ongoing economic challenges. However, strong home equity positions in many markets continue to help buffer against a more significant spike . . .”

This means that even if a homeowner encounters financial difficulty, they often have the option to sell their home rather than go into foreclosure—a stark contrast to 2008, when many owed more than their homes were worth.

In fact, strong equity across the board is one of the most stabilizing forces in today’s housing market. Rick Sharga, Founder and CEO of CJ Patrick Company, shares in a recent Forbes article:

“ . . . 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.”

Bottom Line

While foreclosure filings have risen slightly, they are still far below crisis-era levels. Today’s homeowners are benefiting from responsible lending practices and increased equity, helping keep the market on solid ground. If you're facing financial difficulty, contacting your mortgage provider can open up options that may help you avoid foreclosure altogether.

For any questions about the current housing market or what this means for you, don’t hesitate to reach out to Mike Panza and the team at Panza Home Group. They’re here to help guide you through your real estate journey. Learn more and get in touch here: https://panzarealestate.com/team/mike-panza