South Carolina is America's foreclosure hotspot - dethroning Florida - as it recorded the highest rate of filings relative to the size of its housing market in the month of August.

The state had one for every 1,547 housing units, according to data from real estate analytics firm ATTOM. 

That put South Carolina ahead of Nevada, where the rate was one in every 1,920 housing units, Florida at one in every 2,397, Texas at one in every 2,445 and Maryland at one in every 2,530.

Florida has already been a major foreclosure trouble spot this year, with ATTOM data showing the state led the nation in foreclosure activity during the first half of 2026, with a 21 percent jump compared to a year prior.

But South Carolina has now emerged as the hotspot, with three of its metropolitan areas ranking among the five worst nationwide. 

The state's capital, Columbia, 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 has roughly 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 in every 1,501.

South Carolina moving ahead of Florida in foreclosures per housing unit is notable because it suggests distress is becoming more concentrated in markets that have not traditionally dominated the national foreclosure conversation, according to Ben Mizes, president of Clever Real Estate and a licensed real estate agent.

'Higher borrowing costs, insurance and property expenses, and broader affordability pressure can all make it harder for financially stretched homeowners to recover once they fall behind,' Mizes said.

He said the next question is whether the increase is concentrated in particular metros or among specific groups of borrowers.

'A statewide foreclosure rate can signal growing stress, but the local story often comes down to job conditions, home-price changes, investor activity, and how much equity homeowners have available as a cushion,' Mizes said.

Punta Gorda, Florida, ranked second at one filing for every 1,249 housing units, while Fayetteville, North Carolina, ranked fourth at one in every 1,458.

Three Florida metros made the top ten, including Lakeland-Winter Haven, which ranked sixth at one filing for every 1,549 housing units, and Cape Coral-Fort Myers, which ranked ninth at one in every 1,646.

San Antonio-New Braunfels ranked seventh at one in every 1,556, followed by Las Vegas-Henderson-Paradise at one in every 1,584. Stockton-Lodi, California, rounded out the list at one in every 1,758.

The pattern could point to more than just the broader cost pressures hitting homeowners, according to Steve Jolly, a Nashville broker who tracks foreclosure activity.

Jolly said newer borrowers who bought homes during the post-pandemic boom can be particularly exposed because they may have little equity to fall back on if their finances deteriorate.

'Buyers from 2019-2021 have real equity,' Jolly said. 'Every loan from 2022 forward is underwater if they put 5 percent down.'

That lack of equity can make the difference between being able to sell a home and falling into foreclosure, he said.

'That's the whole story in one line: equity is the escape hatch,' Jolly said. 'A 2019 buyer who loses a job sells the house. A 2023 buyer who loses a job gets a foreclosure notice, because they can't sell for enough to cover the payoff.'

Rising costs can provide the initial shock, Jolly said, with homeowners facing higher insurance premiums, property taxes and other expenses.

'Rising carrying costs are the trigger,' he said. 'Negative equity is what turns a trigger into a completed foreclosure.'

He said that dynamic may help explain why some of the markets with the highest foreclosure rates are seeing problems despite continued demand for housing.

Nationwide, there were 40,277 properties with foreclosure filings in August, including default notices, scheduled auctions and bank repossessions. That was up 1 percent from July and 13 percent from a year earlier.

Lenders started the foreclosure process on 25,894 homes nationally, up 7 percent from August 2025.

The number of homes actually repossessed by lenders climbed even more sharply, with 5,794 properties becoming real estate owned, or REO, in August. That was up 22 percent from July and 42 percent from a year earlier.

ATTOM CEO Rob Barber said the latest figures show foreclosure activity is continuing to run above year-ago levels, particularly among completed proceedings.

'While some homeowners are still facing financial challenges, overall foreclosure volumes remain well below historical norms and the broader housing market continues to demonstrate resilience,' Barber said.

Florida had the most foreclosure starts in August, with 3,189, while Texas was close behind with 3,126. California followed with 2,565.

The two states also accounted for some of the largest concentrations of lender-repossessed homes.

Texas had 1,835 completed foreclosures in August, the most of any state, followed by California with 589. Florida did not make the top five for completed foreclosures, but its cities continued to record some of the country's highest foreclosure rates.

Among metropolitan areas, Houston had the highest number of repossessed homes in August, with 448, followed by Dallas with 402 and San Antonio with 256. Phoenix recorded 186 REOs, while Baltimore had 167.

Jolly also flagged a potential pattern in ATTOM's top ten metro list, noting that Columbia, Fayetteville, Charleston, San Antonio and Las Vegas are all military markets with significant VA-loan activity.

'Five of your ten highest-rate metros sitting next to major installations is worth a look,' he said, while cautioning that the relationship should be tested against VA loan-share data before drawing conclusions.