Some U.S. cities are dealing with way higher foreclosure rates than others. If you’re on the hunt for discounted properties, these spots might catch your eye.
Knowing which cities have the highest foreclosure rates can help you find the best opportunities to buy homes below market value. These areas usually offer cheaper housing, but there are real risks you shouldn’t ignore.
Foreclosure rates can jump for a bunch of reasons—local job losses, economic swings, or sudden changes in the housing market. Macon and some counties in Delaware and New Jersey have foreclosure rates way above the national norm.
This creates chances for buyers who know how to handle the foreclosure process and pick properties wisely. There’s opportunity here, but you’ll need to do your homework.
Key Takeways
- Some cities and states have much higher foreclosure rates than others.
- Economic changes and job losses often lead to more foreclosures.
- Knowing how to buy foreclosed homes can help you find better deals.
Top Cities With the Highest Foreclosure Rates
Foreclosure rates are rising fastest in certain medium-sized cities, especially in the Southeast and Northeast. These places are dealing with economic challenges and housing market changes that could impact your decision to invest or buy.
Current Rankings and Trends
Some of the highest foreclosure rates in 2025 are showing up in Delaware, New Jersey, and Ohio. Delaware’s got about one foreclosure for every 894 homes—pretty wild.
New Jersey and Illinois are up there too, especially in specific counties. Homeowners in these places are struggling more with payments, which means more chances for buyers looking for a deal.
Regional Factors Influencing Foreclosures
Foreclosures seem to cluster in the Northeast and Southeast, but the reasons aren’t always the same. The Northeast faces high living costs and sluggish wage growth.
Meanwhile, some Southeast cities are hit by job losses or slower economic growth. Rising mortgage rates and local policy changes can also make it tougher for homeowners to keep up.
Comparison to National Averages
Nationally, foreclosure rates are lower than what you see in these hotspots. While some cities have one foreclosure per 894 homes, the national average is closer to one in several thousand.
So, if you’re searching outside these areas, you’ll find fewer foreclosures. Focusing on cities with higher rates could mean better deals, but you’ll want to weigh the risks.
Key Drivers Behind High Foreclosure Rates
A mix of factors drives up foreclosure rates in certain cities. Economic shifts, housing market swings, and lending practices all play a part.
Economic Conditions and Unemployment
When jobs disappear, a lot of folks can’t keep up with mortgage payments. Unemployment means less money coming in, so you end up prioritizing basics over your house.
Rising costs for things like food and utilities just pile on the pressure. Some cities get hit harder by job shortages or business closures, which makes foreclosures more common.
If your city keeps losing jobs or wages aren’t growing, the risk of foreclosure goes up for everyone.
Housing Market Volatility
Wild swings in home values can mess with your mortgage plans. If prices drop after you buy, you might owe more than your home is worth—being “underwater” is no fun.
Higher property taxes just add to the headache. Some cities have seen taxes shoot up, pushing more homeowners toward foreclosure.
When homes sit on the market or prices fall, it gets harder to sell or rent out your place to avoid foreclosure.
Lending Practices and Mortgage Defaults
Your mortgage terms matter—a lot. High interest rates, adjustable loans, or big down payments can make things tricky.
Lately, rising interest rates have made monthly payments jump for a lot of people. Adjustable rates can reset higher, and suddenly you’re in over your head.
Sometimes lenders don’t check borrowers as closely as they should. That can mean more defaults when people can’t make bigger payments or lose their jobs.
Table: Lending Factors Affecting Foreclosures
| Lending Factor | Impact on Homeowner |
|---|---|
| High Interest Rates | Increases monthly payments |
| Adjustable-rate loans | Payments can spike unexpectedly |
| Poor credit checks | Loans given to borrowers at risk |
Knowing about these factors can help you spot trouble before you buy or decide to stay put.
How to Buy Foreclosed Properties in These Cities
Buying foreclosures isn’t just about finding a cheap house. You’ll need to research, understand the process, spot risks, and figure out your financing.
Identifying The Best Deals
Start with local government and county websites for foreclosure listings. Online foreclosure sites can be helpful too—just make sure they’re up to date.
Look for recent foreclosures. Older ones might have more damage or more buyers circling.
Check out the neighborhood and the property’s condition. Some foreclosures are real fixer-uppers, so factor in repair costs.
If you can, find a real estate agent who knows foreclosures. They sometimes hear about deals before they’re public.
Step-by-Step Purchase Process
First, dig into the property’s market value and history. Check for liens or back taxes.
If there’s a foreclosure auction, go prepared—sometimes you’ll need cash or pre-arranged financing.
For bank-owned (REO) properties, you’ll submit an offer through the bank or their agent.
Once your offer’s accepted, get a home inspection ASAP. Wrap up the paperwork and close the deal.
Risks and Due Diligence
Foreclosed homes can have hidden headaches—unpaid taxes, liens, or even major repairs. Always check public records.
Inspect the place before buying. Most foreclosures are sold “as-is,” so repairs are your problem.
Sometimes there are squatters or legal snags, so double-check that the title’s clear.
Make sure you know about all the costs, including any back fees or details about taking possession. Skipping due diligence could mean some nasty surprises.
Financing Options for Foreclosure Purchases
Banks usually want cash for foreclosed homes, especially when they’re sold at auction.
But don’t give up hope if you don’t have a suitcase full of bills.
There are special loans out there, like FHA 203(k) loans, that can help if the place needs repairs.
If you’re looking at a bank-owned property (an REO), a conventional mortgage might work—just remember, the house has to meet the lender’s standards.
Some government programs and grants could be out there, especially for first-time buyers or folks purchasing in certain neighborhoods.
Honestly, it’s smart to get pre-approved by a lender before you start making offers. It just puts you in a stronger spot.
