Foreclosures in California have surged to their highest point since the COVID-19 pandemic, with June 2026 data indicating one in every 3,205 housing units in the state entering foreclosure. This trend places California among the top states for foreclosure rates, although national rates saw a slight improvement month-over-month.
Despite the increase, housing market experts suggest that this uptick does not signal a broader housing crisis or market crash. Instead, they describe it as a market normalization following the expiration of pandemic-related relief programs, such as mortgage forbearance and payment deferral. "We’ve come off really historic lows that any uptick is going to draw some attention," said Jake Krimmel, senior economist at Realtor.com.
In the first half of 2026, California recorded 21,543 homes in various stages of foreclosure activity, representing 9% of the national total. This figure ranks third among all states, following Texas and Florida. The counties experiencing the most significant foreclosure rates in June were Lake, Shasta, Sutter, and Mendocino.
Krimmel noted that foreclosed homes, particularly those in need of repair, can present an opportunity for buyers in California's expensive housing market. These properties can sell for 20% to 30% less than comparable homes without a foreclosure designation. "If it’s selling for 20–30% less than it otherwise would just because it has the foreclosure label on it, for the right first-time buyer it could be a solution in a high-cost market like California," Krimmel stated.
Compared to other states, California's increase in foreclosures over the past two years has been relatively modest. The state ranked 12th in terms of the smallest rise in foreclosures, while other states like Colorado and Wyoming have seen significant surges in mortgage payment defaults. Nationally, the decrease in monthly foreclosure activity was driven by a reduction in foreclosure starts, even as completed foreclosures continued to rise.