BY DON FENLEY

The latest ATTOM U.S. Foreclosure Market Report opens 2026 with a familiar theme: foreclosure activity is climbing nationwide, but from historically low levels.

ATTOM reported 40,534 U.S. properties with a foreclosure filing in January, down 10% from December but up 32% from a year ago, marking the 11th straight month of year-over-year increases.

“Foreclosure activity in January rose year over year for the eleventh straight month, continuing a trend that has now carried into early 2026,” said Rob Barber, CEO at ATTOM. “Although foreclosure activity has been rising steadily, overall levels remain well below historic peaks, suggesting that most homeowners are still on stable footing even as higher housing costs and broader economic pressures create stress in certain pockets of the market.”

A Different Story Locally

While the national trend points upward, the Tri-Cities continue to chart its own course.

January foreclosure activity in the Tri-Cities fell 46.9% from December, even as filings more than doubled (+105.8%) compared to January of last year.

In short: the region is seeing year-over-year pressure, but not the month-to-month acceleration showing up in many U.S. markets.

This local divergence isn’t new. Although foreclosure activity has now risen for six consecutive months in the Tri-Cities, the region continues to lag the broader national rebound. Even during the early post-moratorium period in Q1 2025, local foreclosure patterns did not mirror U.S. trends.

Why Foreclosures Stayed Low – Why They’re Returning

When COVID lockdowns began, a nationwide foreclosure moratorium and expanded forbearance programs effectively froze distress in place. The post-pandemic housing boom sent home prices soaring, dramatically increasing homeowner equity and keeping foreclosures unusually suppressed. The local annual median home price increased 50% from the pre-pandemic level.

That artificial calm is fading.

As moratoriums expired, including protections on VA-backed mortgages, foreclosures began inching back toward pre-pandemic norms. Nationally, that rebound picked up speed in early 2025.

But the Tri-Cities entered this period from a position of strength.

In Q1 2019, the region recorded 210 foreclosures. By Q1 2025, that number was just 68.

The same pattern shows up in seriously underwater mortgages. In Q1 2019, slightly more than 13,000 mortgaged properties in the Johnson City and Kingsport-Bristol metros were underwater. By Q1 2025, that number had fallen to fewer than 2,000.

Equity – the Quiet Stabilizer

One reason local distress level remains muted is equity.

Since 2019, the Tri-Cities’ annual median home value has climbed nearly 50%. That equity cushion gives homeowners facing temporary financial strain more options than defaulting into foreclosure.

While 90+ delinquencies on credit cards and auto loans have surged nationally, mortgage delinquencies remain slightly below pre-pandemic levels. And they are substantially lower locally.

That matters, because historically, sustained increases in 90-day mortgage delinquencies precede meaningful rises in foreclosures.

So far, that warning signal simply isn’t flashing in the Tri-Cities.

Looking Ahead: 2026–2027

The key question now is whether foreclosures rise meaningfully in 2026 and 2027.

Based on delinquency trends alone, U.S. foreclosures are likely to tick modestly higher over the next year. But the Tri-Cities enters this period with unusually strong homeowner equity, far fewer underwater mortgages, and mortgage delinquencies well below pre-pandemic levels.

Foreclosures are rising off historic lows but locally, they remain contained, selective, and far from systemic.

For now, the Tri-Cities housing market continues to reflect resilience more than retreat.

Categories: REAL ESTATE