ATTOM’s latest numbers landed with about as much surprise as a Texas August heat advisory. Foreclosure filings rose roughly 10% year over year in July, and while that sounds like an abstract national statistic, I’ve been watching enough courthouse steps in Travis, Tarrant, and Harris counties to know that national averages can hide a lot of local pain — or sometimes local calm.

So let me tell you what I’m actually seeing, and what I’d be paying attention to if I were buying or selling anywhere in the Texas markets I know.

The 10% Headline Matters Less Than the Street-Level Pattern

National data is a starting point, not a destination. When ATTOM says filings are up 10% annually, that number is getting pulled across thousands of counties with wildly different employment pictures, loan composition, and local inventory situations. What matters is whether the trend is showing up in your market, in neighborhoods where you’re actively looking or already own.

What I’ve noticed — and I’m talking about what I’ve seen browsing public filings and driving around, not running a regression — is that the pressure isn’t spread evenly. In Austin, the stress is showing up in outer-ring suburbs more than in close-in East Side zip codes. Pflugerville, Manor, parts of Del Valle — areas where a lot of buyers stretched in 2021 and 2022 with FHA loans and minimal down payments. Those were the buyers who needed rates to hold, appreciation to continue, and their income to stay stable. For some of them, one of those three things didn’t cooperate.

We actually wrote about this pattern earlier this year — foreclosures climbed 21% in the first half of 2026, with FHA and VA loans carrying a disproportionate share of the load. July’s 10% annual uptick is part of that same wave, not a new problem but a continuation.

What’s Driving This in Texas Specifically

A few things converging at the same time:

  • Rate lock fatigue turning into rate-lock failure. People who bought at 6.5–7% hoping to refinance in 18 months are now two or three years into payments they can barely sustain, with rates that haven’t dropped the way everyone expected.
  • Insurance and property tax creep. This one doesn’t get enough attention. In some DFW and Houston-area counties, property taxes are effectively adding $400–700 a month to what a buyer modeled before close. That’s not a rounding error. Property taxes are the affordability crisis no one wants to touch, and for distressed borrowers, they’re often the thing that tips the balance.
  • FHA and VA loan concentration. First-time buyer corridors — think parts of far North Houston near Spring, or Southeast Fort Worth near I-35W — had heavy FHA volume in the 2020–2022 run-up. Less equity cushion means less room to sell before the bank moves.

I’d also add that some pandemic-era forbearance effect is still unwinding. People who deferred payments in 2020–2021 and then worked out modifications are now reaching the end of those modified terms. It’s not dramatic, but it’s real.

How to Read a Rising Foreclosure Market If You’re a Buyer

Here’s what I’d actually do if I were shopping right now and trying to figure out where distressed inventory might create opportunity — without being exploitative about it.

  1. Check ATTOM or the county appraisal district site monthly. Lis pendens filings (the legal notice that foreclosure has started) hit the public record before a property ever shows up on MLS. In Texas, we’re a non-judicial state, so the process moves faster than you might think — sometimes 60 days from first notice to courthouse steps.
  2. Look at days on market in the neighborhoods you’re targeting. When you start seeing listings sit 60, 90, 120 days in a neighborhood that was moving in 3 weeks two years ago, that’s your leading indicator. Motivated sellers — some of whom are trying to sell before the bank does — start appearing.
  3. Get pre-approved before you look at anything. Distressed situations move fast. If a short sale or pre-foreclosure listing hits at the right price, the seller’s timeline won’t wait for you to figure out your financing.
  4. Don’t skip the inspection because you’re excited about the price. A house that a struggling owner has deferred maintenance on for two or three years can carry some serious surprises. I wouldn’t buy anything in that category on a slab without knowing exactly what I was dealing with foundationally — especially in clay-heavy soil areas like much of the Fort Worth side.

The most overlooked opportunity in a rising foreclosure environment, honestly, is pre-MLS and off-market inventory — homeowners who want to sell quietly before the default becomes official. Those deals don’t get advertised.

What Sellers Should Be Thinking About Right Now

If you own in a neighborhood where foreclosure filings are ticking up, you have a choice to make fairly soon. Distressed sales set comps. When a bank-owned property sells at 12% below market to get it off their books, that sale shows up in your appraisal. Do it three times on your block in six months and you’ve quietly repriced the whole street.

I’ve watched this happen before — in the Houston neighborhoods I lived in during the mid-2010s oil patch slowdown, and in parts of Fort Worth in the years after 2008. It doesn’t happen everywhere, but when it does happen it’s faster than most sellers expect.

If you’re thinking about selling in the next 12–18 months and you’re in a zip code that had heavy FHA buyer activity in 2020–2022, I’d be having that conversation now rather than waiting to see how the comps land.

What to Actually Do This Week

Pull up the county appraisal district for wherever you own or are shopping — TCAD for Travis County, DCAD for Dallas, HCAD for Harris — and search recent foreclosure or lis pendens activity in your specific neighborhood, not just the metro. Ten percent nationally is a data point. Your street is a decision.

If you’re a buyer, talk to a lender today about what loan products are actually available to you at your credit profile and down payment — especially if you’ve been sitting on the sidelines hoping for rates to drop. And if you’re a seller with equity and flexibility, the window where you’re competing against very few distressed comps may not stay open as long as you’d like to think.