Unemployment and foreclosure activity were the primary drivers of housing market risk in the first quarter of 2026, with clusters of vulnerable counties in Florida and California along with safer markets concentrated in Tennessee.

Escrow costs are up 45% since 2019 and some high FHA states saw prices down 10% to 20%, increasing default risk as cures fall.

Auction.com Q1 2026 data shows foreclosure and REO auctions rebuilding toward 2020 levels, with local pricing and demand driving outcomes.

HOA lien filings rose 8.6% in 2025 to nearly 285,000 nationwide, with Florida leading in volume and Louisiana and Colorado driving increases.

Foreclosure activity accelerated in the first quarter of 2026, with signs of mounting operational pressure for mortgage servicers and downstream vendors.

Student-loan delinquencies rose to 16.3% in Q4, New York Fed data shows, as overall delinquency hit 4.8% and foreclosures increase.

U.S. foreclosure filings reached 40,534 in January 2026, up 32% from last year, with Delaware having the highest rate among all states.

The proposals come amid mounting complaints that say fines and legal fees imposed by HOAs have spiraled into liens and foreclosure threats.