The west may be the best, but not for office space vacancies. National office vacancy rates were 20.5% as of Q4 2025, according to Cushman and Wakefield.
Newsom country (California) leads the nation in terms of office vacancy with San Francisco leading the pack at 33.1, Seattle at 32.3% and LA CBD at 31.7%
Q4 2025 Office Vacancy Rates – Cushman and Wakefield
While its not the 2009, we do have a house price bubble that is deflating as The Fed slows M2 Money growth. However, we are witnessing rising foreclosure rates.
Lenders started the foreclosure process on 289,441 U.S. properties in 2025, up 14 percent from 2024, up 213 percent from the pandemic-era low in 2021, but down 14 percent form 2019 and down 86 percent from a peak of 2,139,005 in 2009.
States that saw the greatest number of foreclosure starts in 2025 included Texas (37,215 foreclosure starts); Florida (34,336 foreclosure starts); California (29,777 foreclosure starts); Illinois (15,010 foreclosure starts); and New York (13,664 foreclosure starts).
Those metropolitan statistical areas with a population greater than 1 million that saw the greatest number of foreclosure starts in 2025 included New York, NY (14,189 foreclosure starts); Chicago, IL (13,312 foreclosure starts); Houston, TX (13,009 foreclosure starts); Miami, FL (8,936 foreclosure starts); and Los Angeles, CA (8,503 foreclosure starts).
Bank repossessions increase year over year
Lenders repossessed 46,439 properties through foreclosures (REO) in 2025, up 27 percent from 2024 but down 68 percent from 143,955 in 2019, the last full year before pandemic-related declines, and down 96 percent from a peak of 1,050,500 in 2010.
States that saw the greatest number of REOs in 2025 included Texas (5,147 REOs); California (4,030 REOs); Pennsylvania (2,975 REOs); Florida (2,869 REOs); and Illinois (2,768 REOs).
Those metropolitan statistical areas with a population greater than 1 million that saw the greatest number of REOs in 2025 included Chicago, IL (2,033 REOs); New York, NY (1,462 REOs); Houston, TX (1,381 REOs); Detroit, MI (1,105 REOs); and Philadelphia, PA (1,100 REOs).
Florida, Delaware, and South Carolina record the worst foreclosure rates in 2025
States with the worst foreclosure rates in 2025 were Florida (1 in every 230 housing units with a foreclosure filing); Delaware (1 in every 240 housing units); South Carolina (1 in every 242 housing units); Illinois (1 in every 248 housing units); and Nevada (1 in every 248 housing units).
Rounding out the top 10 states with the worst foreclosure rates in 2025, were New Jersey (1 in every 273 housing units); Indiana (1 in every 302 housing units); Ohio (1 in every 307 housing units); Texas (1 in every 319 housing units); and Maryland (1 in every 326 housing units).
Lakeland, Columbia, and Cleveland post the worst metro foreclosure rates in 2025
Among 225 metropolitan statistical areas with a population of at least 200,000, those with the worst foreclosure rates in 2025 were Lakeland, FL (1 in every 145 housing units with a foreclosure filing); Columbia, SC (1 in every 165 housing units); Cleveland, OH (1 in every 187 housing units); Cape Coral, FL (1 in every 189 housing units); and Atlantic City, NJ (1 in every 192 housing units).
Metro areas with a population greater than 1 million, including Cleveland that had the worst foreclosure rates in 2025 were: Jacksonville, FL (1 in every 200 housing units); Las Vegas, NV (1 in every 210 housing units); Chicago, IL (1 in every 214 housing units); and Orlando, FL (1 in every 217 housing units).
Average time to foreclose decreases
U.S. properties foreclosed in the fourth quarter of 2025 had been in the foreclosure process an average of 592 days, a 3 percent decrease from the previous quarter and a 22 percent decrease from a year ago.
States with the longest average time to foreclose in Q4 2025 were Louisiana (3,461 days); New York (1,998 days); Hawaii (1,760 days); Connecticut (1,600 days); and Kansas (1,594 days).
There was a total of 111,692 U.S. properties with foreclosure filings in Q4 2025, up 10 percent from the previous quarter and up 32 percent from a year ago.
Nationwide in Q4 2025, one in every 1,274 properties had a foreclosure filing.
December 2025 Foreclosure Activity Key Takeaways
Nationwide in December 2025, one in every 3,163 properties had a foreclosure filing.
States with the worst foreclosure rates in December 2025 were New Jersey (one in every 1,734 housing units with a foreclosure filing); South Carolina (one in every 1,917 housing units); Maryland (one in every 1,961 housing units); Delaware (one in every 2,044 housing units); and Florida (one in every 2,119 housing units).
28,269 U.S. properties started the foreclosure process in December 2025, up 19 percent from the previous month and up 46 percent from a year ago.
Lenders completed the foreclosure process on 5,953 U.S. properties in December 2025, up 53 percent from the previous month and up 101 percent from a year ago.
Conclusion
ATTOM’s Year-End 2025 Foreclosure Market Report shows that U.S. foreclosure activity increased in 2025, with foreclosure filings, starts, and bank repossessions all rising compared to 2024, signaling a continued shift toward more normalized market conditions. Despite the annual increases, foreclosure activity remains significantly below pre-pandemic levels and far below peaks seen during the last housing crisis. December 2025 and Q4 2025 data also showed increased foreclosure activity on both a monthly and annual basis.
Florida home prices are tanking with Fort Myers leading the collapse at -11.9% YoY.
The Federal Reserve prints a lot of money (M2). Unfortunately, it largely benefits elites (the top 1%). The bottom 50% get some benefits, but the gains in net worth largely benefits the elite class.
This sounds like a legal Somali daycare scheme. Perhaps The Fed should be renamed “The Federal Quality Learing Center.”
Yes, Somalis have daycare centers in Columbus Ohio. Thanks Governor Dewine for doing absolutely nothing to reign in their fraud. /sarc
President Trump ordered Fannie Mae and Freddie Mac to operate like The Federal Reserve. Buying assets to manipulate interest rates. In this case, F&F have been ordered to buy $200 billion of agency MBS.
Thursday’s Truth Social post triggered an immediate snap tighter in mortgages, led by the belly and lower coupons. By pulling MBS spreads tighter and crowding out real-money buyers, Fannie and Freddie’s purchases would push incremental demand into Treasuries as the next-best duration substitute, putting a modest bid under the belly of the curve.
However, execution and the ultimate size of purchases is still unclear, as my colleague Alyce Andres noted. If the government-sponsored enterprises GSEs stagger purchases, and signal an ultimate increase above the announces $200 billion, further tightening should occur. They can fund a lot of the buys from existing liquidity portfolios, though there’s a path where they could issue short-term debt to preserve operating buffers and could nudge repo wider at the margin.
The bigger transmission channel is hedging, as highlighted by colleagues Ira Jersey and Will Hoffman. Unlike the Fed, the GSEs actively hedge MBS holdings, shedding duration by paying fixed rates in swaps and using swaptions to manage the negative convexity and vega risks embedded in mortgages. That matters for swap spreads and for volatility, especially in the belly.
That’s why GSE MBS purchases don’t have to be huge to change the feel in rate markets. The post-Global Financial Crisis regime dulled the classic convexity feedback loop because the Fed held such a large amount of agency MBS and didn’t hedge it, while the GSEs shrank their portfolios. Trump’s directive risks bringing more of that regime back.
A recent note out of Goldman Sachs frames it cleanly: A $200 billion build could lift the active convexity-hedger footprint by about 25%. The street then starts front-running the mechanical flows — paying in selloffs, receiving in rallies — which makes breakouts more likely even if day-to-day ranges look calm, Goldman added.
Positioning makes the setup more precarious. JPMorgan already saw mortgage valuations as a “bit snug” before the announcement, while BofA flagged that rates market had recently added fresh belly shorts sitting against a backdrop of benchmark funds still overweight MBS versus IG.
That mix can keep the initial tightening sticky, but it also raises the odds of sharp reversals if the market decides the purchasing flows are slower, smaller, or more heavily hedged than hoped.
Fannie and Freddie’s retained portfolio are soaring along with the duration gap.
The effect on mortgage rates has so far has been negligible. The 30-year conforming mortgage just fell below 6% at 5.99%.
The littany of horror stories about government attempts to make housing more “affordabl;e” at enmdless.
New York mayor Zoran Mandami appointed Cea Weaver as New York City’s housing Tsar allegedly to make housing more affordable. Her proposal? People should pay 30% of their income for housing. if you have no income, you pay zero. Then she decreed that you must offer your multifamilty property to the city first before you sell it in the open market. Allegedly for the “greater good.” Which means a small number of elites will make a fortune (Mandami donors?).
But harken back to the Clinton Administration where they issue a proclamation to make housing more affordable, the national homeownership strategy. This strategy helped usher in an era of lowering credit standards and higher LTV lending. Leading to the mortgage crisis of 2008. Thanks a lot Bill and Hill!
And then we have The Federal Reserve, the master manipulators of interest rates. While mortgage rates have fallen recently to around 6%, they are up 134% from Biden’s Maladministration. So while The Fed contributed to the housing bubble that blew up and nearly destroyed the banking industry.
Government and especially Cea Weaver. A child of privelege.
Mortgage demand is recovering slowly from Biden-era mismanagement. Rising mortgage rates coupled with rising home prices made housing affordability get flushed down the toilet.
Mortgage applications decreased 9.7 percent from two weeks earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 2, 2026. The results include an adjustment for the holidays.
The Market Composite Index, a measure of mortgage loan application volume, decreased 9.7 percent on a seasonally adjusted basis from two weeks earlier. On an unadjusted basis, the Index decreased 28 percent compared with two weeks ago. The unadjusted Refinance Index decreased 31 percent from two weeks ago and was 108 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 6 percent from two weeks earlier. The unadjusted Purchase Index decreased 23 percent compared with two weeks ago and was 10 percent higher than the same week one year ago.
The holiday adjusted Refinance Index decreased 14 percent from two weeks ago and was 133 percent higher than the same week one year ago.
With all the breaking news about Maduro’s capture in Venezuela and the potential collapse of Iran’s Islamic government, I will provide some good news for investors about Mortgage-backed Securities (MBS).
Mortgage-backed securities (MBS) are capping off an exceptionally strong 2025 with further outperformance in December, beating the rest of the aggregate bond market on an excess return basis. Both total and excess returns for full year 2025 were the highest in more than a decade. MBS performance has been boosted by spread tightening as volatility declined and scarce net supply that was met with resilient demand, including renewed GSE and overseas buying.
Thanks to University of Chicago graduate Erica Adelberg.
Confounded Interest - Anthony B. Sanders 
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