New home sales surge in the U.S. in May, as median home price beats records
Foreclosures are on the rise as home prices hit record highs. FREDERIC J. BROWN/AFP via Getty Images

An analysis has found that as home prices have continued to rise, so too have foreclosure filings. ABC News reported that foreclosure filings rose by 71 percent between 2020 and 2025.

"If there are economic stresses on a household, people have to make decisions," Jacob Inwald, director of litigation for economic justice at Legal Services NYC told the outlet. "What bill am I going to pay now? What bill am I going to put off?"

ABC News looked at foreclosures by zip code when compiling the data. They found that Florida had the highest number of annual foreclosure filings. Other states with high numbers of foreclosures included New Jersey, Delaware, Nevada, South Carolina, Illinois, California, Maryland, Ohio and Arizona.

According to the National Association of Realtors (NAR), home prices reached an all-time median high of $440,600 in June, a 1.8 percent increase. However, the increase in cost came even as home sales declined.

Read more

The NAR reported that pending home sales in June fell by 5.4 percent. The association also noted rising mortgage rates and high home prices appear to be driving people out of the market.

"The highest mortgage rates in nearly a year and the record-high national median home price together are contributing to a tepid housing market that is especially difficult for first-time homebuyers," said NAR Chief Economist Dr. Lawrence Yun.

"It is worth emphasizing that it is closing activity, not contract signings, that generates economic impact. Pending contracts are only suggestive of upcoming closed deals and do not align perfectly, due to fallout rates and contract contingencies," he said.

According to ABC News, the high prices and relatively high mortgage rates are also driving the rise in foreclosures. The network noted that although foreclosures have risen, they still are not in the ballpark of where they were during the peak of the housing crisis 15 years ago.

Other factors cited as contributing to more foreclosures include higher insurance costs and the end of pandemic protections.