11/10/2025

 National Trends

In the final quarter of 2025, foreclosure activity increased modestly across the United States, reflecting ongoing affordability challenges and regional economic stress. 

Nationwide, roughly 101,500 properties received foreclosure filings between July and September—up less than 1% from the previous quarter, but 17% higher than a year ago. 

The greatest number of new foreclosure starts were seen in Texas, Florida, and California, with these states leading all others in total filings and completed repossessions. Lenders repossessed about 11,700 properties nationally during this quarter, marking a 4% increase from Q3 and 33% rise year-over-year.

Nationwide, about 1 in every 4,000 homes experienced a foreclosure filing during September. Foreclosure starts increased 16% year-over-year. The percentage of vacant or abandoned “zombie” pre-foreclosure properties remained low, at around 3.25% of all homes in foreclosure, as most homeowners maintain notable equity and demand remains robust.

Michigan Market Overview

In Michigan, foreclosure rates remained lower than the national average. For the last quarter of 2025, the state ranked 26th for foreclosure risk, with approximately 1,090 filings through September. Counties like Montmorency, Muskegon, and Sanilac had rates above the state baseline, and cities such as Detroit and Flint continued to have higher concentrations of bank repossessions. However, overall trends show a continued slowdown compared to peak pandemic years.

The median home price in Michigan rose to about $285,000, up 7.4% year-over-year. Inventory increased and homes stayed on the market slightly longer, as rising interest rates tempered buyer demand in some segments. Most homes affected by foreclosure in Michigan were single-family, with urban and economically distressed areas continuing to struggle more than their suburban or rural counterparts.

Demographics

Nationally and within Michigan, foreclosures have disproportionately affected middle-aged adults (ages 40–60), especially in communities hit by job losses or income reductions. Minority and lower-income households remain more at risk, with metropolitan neighborhoods reflecting above-average rates. Younger buyers still face hurdles from rising interest rates and reduced affordability, while older residents are encountering issues in fixed-income communities.

Forecast for Early 2026

Market analysts predict that while foreclosure rates in Michigan and across the country may hold steady or even decline slightly in the beginning of 2026, risks persist in areas lacking robust economic and employment recovery. Early action—engagement with housing counselors, financial educators, and legal support—remains critical for homeowners at risk.