South Carolina Overtakes Florida as Foreclosure Hotspot
New data shows South Carolina recorded the highest rate of foreclosure filings relative to its housing market size in August, unseating Florida.
South Carolina has emerged as the state with the nation's highest foreclosure rate, surpassing Florida for the unenviable top spot in August. The state recorded one foreclosure filing for every 1,547 housing units, according to data from real estate analytics firm ATTOM.
Nevada followed with a rate of one in every 1,920 housing units, while Florida's rate stood at one in every 2,397. Texas and Maryland rounded out the top five.
This shift is significant because it indicates foreclosure distress is concentrating in markets not traditionally at the forefront of the national conversation, according to Ben Mizes, president of Clever Real Estate. He noted that factors such as higher borrowing costs, insurance, and property expenses, coupled with broader affordability pressures, can make it difficult for financially strained homeowners to recover.
Among metropolitan areas with populations of at least 200,000, Columbia, South Carolina, had the highest foreclosure rate nationwide, with one filing for every 1,232 housing units. Spartanburg, South Carolina, ranked third with one foreclosure filing for every 1,262 housing units, and Charleston-North Charleston ranked fifth at one in every 1,501 housing units. IMAGE2 IMAGE5 IMAGE6
Florida still features prominently in the list of worst-hit metro areas. Punta Gorda, Florida, ranked second with one filing for every 1,249 housing units. IMAGE7 
Steve Jolly, a Nashville broker who tracks foreclosure activity, suggested that borrowers who purchased homes during the post-pandemic boom may be particularly vulnerable due to limited equity. He explained that homeowners with recent mortgages, especially those with low down payments, might find themselves unable to cover their loan payoff if they sell their property and face financial difficulties. This lack of equity, he stated, can be the critical factor turning a financial trigger into a completed foreclosure.
Nationwide, August saw 40,277 properties with foreclosure filings, a 1 percent increase from July and a 13 percent rise from the previous year. Lenders initiated foreclosure proceedings on 25,894 homes, up 7 percent year-over-year. The number of homes repossessed by lenders climbed significantly, with 5,794 properties becoming real estate owned (REO), a 22 percent increase from July and a 42 percent jump from August of the prior year. IMAGE3
Despite the increases, ATTOM CEO Rob Barber noted that overall foreclosure volumes remain below historical norms and the broader housing market shows resilience. Florida led states in foreclosure starts in August with 3,189, followed closely by Texas with 3,126. Texas also recorded the highest number of completed foreclosures at 1,835, with California following at 589.
Jolly also pointed to a potential pattern among military markets with significant VA-loan activity, noting that five of the top ten highest-rate metros are located near major military installations. However, he cautioned that this observation requires further testing against VA loan-share data to draw definitive conclusions.