Foreclosures at highest level in six years, mortgage rates stuck at 6.53%, Realtors bailing out
Metros in Florida and Texas saw the largest increases in foreclosure rates
Not to be disrespectful to our Realtor friends, but they are displaying the behavior often attributed to rats trapped aboard a troubled ship. A lethal combination of high interest rates, a shortage of inventory and payment troubles by current homeowners, make it clear the real estate market is not a pleasant place to be right now.
Perhaps the most distressing development finds rising mortgage delinquencies and foreclosures. The latest report from analytics firm Cotality found that the share of mortgages in some stage of delinquency was 3%, a 0.2 percentage point increase from March 2025.
The foreclosure inventory rate also increased for the first time in 15 months to 0.4%, a 0.1 percentage increase from March 2025, signaling a shift from the extended period of stability seen since late 2024.
The highest foreclosure rate “reflects a gradual transition from the historically low levels seen through 2024, as more loans move through later stages of delinquency,” said Molly Boesel, Senior Principal Economist at Cotality. “The uptick is not isolated — 77% of U.S. metros are now experiencing increases in foreclosure rates, signaling that the trend is broad-based rather than concentrated in a few markets.
“In many areas, particularly across parts of Florida and Texas, the rise in foreclosure activity aligns with earlier increases in serious delinquencies, suggesting that once borrowers fall behind, it is becoming more difficult to recover,” she said.
Mortgage rates edging up
The housing market continues to deliver the slow-motion grind it has produced since 2022. The average rate on a 30-year fixed mortgage edged up to 6.53 percent from 6.51 percent the prior week, according to Bloomberg citing Freddie Mac. Buyside data at The Wall Street Journal put Bankrate’s national 30-year average at 6.62 percent, with 15-year fixed at 6.01 percent and 5/1 ARMs at 5.96 percent.
CBS News reported this week that mortgage costs have climbed nearly 10 percent on average since January and that Jeff Taylor of the Mortgage Bankers Association expects rates to remain in the mid-to-upper 6 percent range for the balance of the year, with potential for a move into the 7s “if the Iran conflict is protracted.”
Agents head for the door
The drumbeat is wearing down the industry that depends on volume. The Wall Street Journal on Thursday reported on real-estate agents quitting after a fourth straight year of weak transaction counts, with brokerage owners in places like Fort Worth, Texas, describing a profession reaching a breaking point.
For would-be buyers, the math is unforgiving: higher rates push monthly payments higher just as inflation eats into the down-payment savings households were supposed to be building.