With so many prices going up lately, it's completely understandable to be concerned about what this might mean for the housing market. Many are starting to question whether more homeowners will find it tough to keep up with their mortgage payments, which could result in a rise in foreclosures. Recent data indicating an increase in foreclosure filings is adding to this anxiety. However, it's important not to let these fears overwhelm you.

Looking at the most recent data, it’s evident that we’re not facing a situation similar to the previous housing crash.

This Isn’t Like 2008

Foreclosure filings may have increased in the latest quarterly report from ATTOM, but they remain below the average and significantly lower than the figures from the crash. It’s much clearer when you look at the data in a graph.

When you look at Q1 2025 (on the right side of the graph) and compare it to the years around the 2008 crash (highlighted in red), it’s obvious that the market has changed significantly.

Years ago, many homeowners found themselves in a tight spot because of risky lending practices. These loans often came with monthly payments that were too high to manage, resulting in a surge of foreclosures. This influx of distressed properties overwhelmed the market, creating a surplus that drove home prices down significantly.

Lending standards have tightened significantly today, and most homeowners are financially better off now. That's why we’re seeing a decrease in filings compared to before.

If you're looking back at 2020 and 2021 and thinking the market has really taken off since then, here's the scoop. Those years saw a foreclosure moratorium put in place to help many homeowners during tough times. That’s why the numbers from a few years ago were so low.

Don't compare today to that low point. If you look at more typical years like 2017 to 2019, you'll see that foreclosure filings are actually lower than usual—and significantly lower than what we experienced during the crash.

No one wants to face foreclosure, and it's understandable to feel emotional about the recent rise in cases since real lives are affected. However, it's important to remember that this trend doesn’t indicate a broader problem in the market.

Why We Haven’t Seen a Big Surge in Foreclosures

Here's something to put your mind at ease: homeowner equity. In recent years, home prices have seen a significant increase. This means that homeowners today have developed a strong financial safety net. As Rob Barber, CEO of ATTOM, points out:

““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 . . .”
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— Rob Barber, CEO at ATTOM

If someone is struggling financially and can't keep up with their mortgage payments, they might have the option to sell their home instead of facing foreclosure. This is really different from what happened in 2008, when a lot of people were in a tough spot, owing more on their homes than what they were actually worth, leaving them with no choice but to let their homes go.

It's important not to overlook the solid equity that many homeowners currently enjoy. Rick Sharga, the Founder and CEO of CJ Patrick Company, highlighted this point 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.”
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— Rick Sharga Founder and CEO of CJ Patrick Company

Bottom Line

Foreclosure numbers have gone up recently, but they’re still not anywhere near the levels we saw during the crash in 2008. Additionally, most homeowners today have much better equity positions, even with rising costs.

If you’re a homeowner going through tough times, reach out to your mortgage provider to discuss the options available to you.