Growing Concern: Increases in Zombie Foreclosures Across the United States

Rising Zombie Foreclosures: An Emerging Challenge in the Housing Market

In an alarming trend, the latest report from ATTOM, a key player in property data and real estate analytics, reveals a significant increase in zombie foreclosures across the United States during the second quarter of 2026. With the number of vacant homes hitting 1.4 million, or 1.3% of all residential properties, the stability of this figure compared to previous quarters highlights both a troubling stagnation and a slow return to pre-pandemic norms in the foreclosure market.

What are Zombie Foreclosures?

Zombie foreclosures refer to homes where the owner has entirely abandoned the property before the foreclosure process is completed. These homes typically remain vacant and can contribute to neighborhood blight and declining property values, thereby impacting the overall housing market.

In total, there are currently 245,376 residential properties in the foreclosure process, with approximately 3.4% of these categorized as zombie properties. This slight uptick from 3.3% in earlier quarters signals a potential growth trajectory for these abandoned homes amidst an otherwise stable national vacancy rate.

State-by-State Analysis

The ATTOM report highlights that in 38 out of 50 states, along with the District of Columbia, there has been a quarter-over-quarter increase in zombie properties. Among the states reporting the highest increases, Georgia saw a staggering 98% jump, with North Carolina and Indiana following closely behind at increases of 67.2% and 42%, respectively. Such dramatic upticks raise serious questions about the conditions leading to these foreclosures.

Conversely, two states displayed a decrease in zombie properties: Washington, which saw a 13.1% decline, and New York, with a minor drop of 2.2%. Despite this, New York remains home to over 1,300 zombie properties, underscoring a persistent challenge in managing these abandoned homes.

Regional Trends and Vacancy Rates

The report also emphasizes regional discrepancies in vacancy rates, with the highest rates observed in states such as Oklahoma and Alabama, both at 2.4%. Conversely, the lowest rates were noted in New Hampshire and Vermont, which recorded rates as low as 0.3%. These statistics indicate not only the scope of the problem but also where interventions may be most needed.

In metropolitan areas, neighborhoods like Cedar Rapids, IA reported the highest zombie foreclosure rate at 13.2%, while other cities in Ohio also exhibited concerning figures. In sharp contrast, others like Grand Rapids, WY managed to keep their zombie rates well below 1%, highlighting effective property management.

The Investor Segment

An alarming trend highlighted by the report is the higher vacancy rates among properties owned by institutional investors, which stand at a rate more than double that of overall residential stock. With states like Indiana and Illinois leading the pack for investor-owned properties at 7.1% and 6.2% respectively, these figures suggest a growing need for investors to address vacancy issues proactively.

Conclusion

In summary, ATTOM's second-quarter analysis of vacant and zombie properties paints a picture of a housing market grappling with the consequences of abandonment amid broader economic uncertainty. As zombie foreclosures continue to rise, the implications extend beyond individual property values to the health of neighborhoods and, by extension, local economies. Addressing this issue will require concerted efforts from both state governments and the private sector to ensure abandoned properties do not contribute to further declines in community vitality.

About ATTOM

ATTOM provides AI-powered insights across a vast array of real estate data, emphasizing their commitment to offering the most comprehensive and validated property intelligence solutions available today. As the market evolves, their insights remain critical for stakeholders looking to navigate the complexities of the housing market effectively.