Foreclosures Are Rising — But Here's Why California Buyers Shouldn't Panic

Foreclosure activity is ticking up to a six-year high, but it's still well below pre-pandemic levels. Here's what this means for California homebuyers and investors.

Foreclosure activity has been quietly creeping upward. As of June 2026, the share of mortgages in active foreclosure hit 0.53% — the highest we've seen in six years — and foreclosure sales were up 16% compared to a year ago.

That sounds alarming at first glance, but let's put it in perspective: foreclosure sales are still 46% below pre-pandemic levels. In other words, we're rising from an unusually low floor, not heading toward a crisis.

The biggest reason the market remains stable? Homeowner equity. Most homeowners — especially in California — have built up significant equity over the past several years. When borrowers face financial hardship, that equity gives them options: a sale, a refinance, or a loan modification. It acts as a buffer that prevents distressed situations from turning into full-blown foreclosures.

For buyers, a modest rise in foreclosures can actually create opportunity — more inventory and potentially motivated sellers. For current homeowners, it's a good reminder to stay on top of your mortgage and explore options early if you're facing financial strain.

Thinking about buying, refinancing, or tapping your equity? Contact us today and let's talk strategy.