South Carolina has surpassed Florida as the state with the highest rate of foreclosure filings relative to its housing market size in August 2026. According to data from real estate analytics firm ATTOM, South Carolina recorded one foreclosure for every 1,547 housing units. In comparison, Nevada had one filing for every 1,920 units, Florida at one for every 2,397, Texas at one for every 2,445, and Maryland at one for every 2,530.
Florida had previously been a significant foreclosure area this year, leading the nation in foreclosure activity during the first half of 2026, with a 21 percent increase compared to the previous year. However, South Carolina's emergence as the new hotspot is marked by three of its metropolitan areas ranking among the five worst nationwide for foreclosure rates.
Columbia, South Carolina's capital, had the highest foreclosure rate among metropolitan areas with populations of at least 200,000, with one filing for every 1,232 housing units. The metro area has approximately 849,000 residents and 378,275 housing units. Spartanburg ranked third nationally with one filing for every 1,262 housing units, while Charleston-North Charleston ranked fifth at one for every 1,501.
Ben Mizes, president of Clever Real Estate, noted that South Carolina's rise in foreclosure rates suggests that distress is becoming more concentrated in markets that have not traditionally been associated with high foreclosure rates. He highlighted that factors such as higher borrowing costs, insurance, property expenses, and general affordability pressures can hinder financially strained homeowners from recovering once they fall behind on payments.
Mizes also pointed out that while a statewide foreclosure rate can indicate growing stress, local conditions such as job availability, home-price fluctuations, investor activity, and homeowner equity are critical to understanding the situation.
In addition to South Carolina's statistics, Punta Gorda, Florida, ranked second with one filing for every 1,249 housing units, and Fayetteville, North Carolina, ranked fourth at one for every 1,458. Florida had three metropolitan areas in the top ten, including Lakeland-Winter Haven at sixth with one filing for every 1,549 housing units and Cape Coral-Fort Myers at ninth with one for every 1,646.
Steve Jolly, a Nashville broker, indicated that newer borrowers who purchased homes during the post-pandemic boom may be particularly vulnerable due to limited equity. He explained that rising costs, including insurance premiums and property taxes, can serve as initial shocks leading to foreclosure.
Nationwide, there were 40,277 properties with foreclosure filings in August, marking a 1 percent increase from July and a 13 percent increase from the previous year. Lenders initiated the foreclosure process on 25,894 homes nationally, up 7 percent from August 2025. The number of homes repossessed by lenders also rose sharply, with 5,794 properties becoming real estate owned (REO) in August, a 22 percent increase from July and a 42 percent increase from a year earlier.
Rob Barber, CEO of ATTOM, stated that while some homeowners continue to face financial challenges, overall foreclosure volumes remain below historical norms, and the broader housing market continues to show resilience.