U.S. foreclosure filings reached a six-year high in the first quarter of this year, with nearly 119,000 properties experiencing a foreclosure filing. This represents a 26% increase from the same period a year earlier. This rise signifies a return to pre-pandemic norms and is largely attributed to escalating homeownership costs, including property taxes, home insurance, and homeowners association (HOA) dues.
Home insurance bills averaged $2,948 last year, up 12% from 2024, while average property taxes for U.S. single-family homes increased 3% to $4,427. HOAs are also raising their fees due to higher insurance and maintenance costs. These rising expenses create a "layering effect" that can lead to distress for homeowners, especially those who bought recently, according to Marina Walsh, an economist at the Mortgage Bankers Association.
HOA liens are a significant contributor to the financial strain. Homeowners associations filed 284,933 liens in 2025, an 8.6% jump from 262,446 in 2024, which is equivalent to one lien every 90 seconds. Florida led with 49,447 HOA liens, a 9.9% increase, while Louisiana saw the biggest spike at 178.9%. These liens can snowball with late fees and legal expenses, and if unresolved, can lead to foreclosure, even if mortgage payments are current. For example, one homeowner fell $3,000 behind in HOA dues, which grew to nearly $7,000.
The winding down of Covid-era borrower relief programs and less effective loan modifications due to high interest rates (above 6%) further exacerbate the situation. A loan modification, in the current environment, often increases a borrower's monthly payment instead of reducing it, making it harder to catch up. The Intercontinental Exchange found that homeowners spending a larger share of their housing costs on home insurance are more likely to be past due on their mortgage payments.
