FL & SC Foreclosure Spotlight: Why These States Are Seeing Rising Rates in 2026

If you've been paying attention to the housing news lately, or maybe you're living it firsthand, you've probably noticed something troubling happening in Florida and South Carolina. Foreclosure activity is climbing, and for a lot of families, it feels like the ground is shifting under their feet.

Let's sit down and talk about what's really going on in these two states, why it's happening, and most importantly, what you can do if you find yourself caught in the middle of it.

The Numbers Tell the Story

Here's the deal: Florida and South Carolina aren't just seeing a slight uptick in foreclosures. They're leading the pack in the Southeast, and in many cases, the entire nation.

Florida currently holds the top spot nationally, with approximately one foreclosure filing for every 230 housing units. That's a staggering number when you think about it. Meanwhile, South Carolina isn't far behind, ranking third in the country with one filing for every 242 homes.

And if we zoom into specific metro areas? It gets even more eye-opening:

• Lakeland, Florida posted the worst foreclosure rate in the entire country, one in every 145 homes.

• Columbia, South Carolina came in second place nationally, with one in every 165 homes facing foreclosure.

These aren't just statistics. These are real families, real homes, and real stress.

So Why Florida and South Carolina?

You might be wondering: what's so different about these two states? Why are they getting hit harder than, say, Georgia or Tennessee?

The truth is, it's a perfect storm of factors coming together at the worst possible time.

1. The Insurance Crisis Is Real

Let's start with what's probably the biggest elephant in the room: insurance costs.

If you own a home in Florida (especially South Florida), you already know this pain. Homeowner's insurance premiums have skyrocketed over the past few years. We're talking 30%, 40%, even 50% increases in some areas. And for folks living in older condo buildings? It's even worse.

After the tragic Surfside condo collapse in 2021, regulations tightened around older high-rise buildings. That meant mandatory inspections, structural repairs, and special assessments that have blindsided many condo owners with bills in the tens of thousands of dollars. Some simply can't afford it.

South Carolina is feeling the insurance pinch too: especially in coastal areas where hurricane risk keeps premiums climbing year after year.

When your insurance bill suddenly doubles and your mortgage payment jumps along with it, that's when things start falling apart.

2. Property Taxes Keep Climbing

On top of insurance, property taxes in both states have been creeping upward. Home values shot up during the pandemic boom, and while that sounds great on paper, it also means higher tax assessments. For homeowners on fixed incomes or tight budgets, this has been the straw that breaks the camel's back.

3. Interest Rates Changed the Game

Remember when mortgage rates hit historic lows during the pandemic? Back in 2021, the national average was around 2.96%. Fast forward to today, and we're looking at rates hovering around 6.14% or higher.

Here's the problem: a lot of people bought homes at peak prices when rates were low. Now, if they need to refinance or if they had adjustable-rate mortgages, they're facing payments they never planned for. And selling isn't always an option when you're underwater or the market has cooled.

4. Pandemic Protections Are Long Gone

During COVID, there were moratoriums that protected homeowners from foreclosure. Those safety nets expired a while back, and lenders have been working through a backlog of distressed loans ever since.

What we're seeing now isn't necessarily a new crisis: it's the delayed fallout from years of accumulated financial strain finally catching up.

Is This a Housing Crisis?

Here's some perspective that might help: experts are calling this "market normalization" rather than a full-blown housing crisis.

National foreclosure activity rose from 0.23% to 0.26% of U.S. homes in 2025: but that's still about 25% below pre-pandemic 2019 levels. So while the numbers are climbing, we're not back to the chaos of the 2008 crash. Not even close.

That said, if you're the one facing foreclosure, statistics don't make it feel any less overwhelming. And that's okay. Your feelings are valid, and your situation matters.

What Can You Do Right Now?

If you're a homeowner in Florida or South Carolina feeling the pressure, here are some steps you can take today:

Talk to Your Mortgage Servicer

Before you panic, pick up the phone. Many servicers have hardship programs, forbearance options, or loan modification programs that could help you get back on track. We'll be diving deeper into this in an upcoming post about loan modification secrets, so stay tuned.

Look Into HUD-Approved Housing Counselors

Here's something a lot of people don't know: HUD-approved housing counselors are free. They can help you understand your options, negotiate with your lender, and create a game plan. We'll have a full guide on this coming soon, but in the meantime, you can search for counselors in your area at hud.gov.

Check Your State's Homeowner Assistance Fund (HAF)

Both Florida and South Carolina have state-specific financial aid programs designed to help homeowners who fell behind due to the pandemic or economic hardship. These funds can cover past-due mortgage payments, property taxes, and even insurance. Don't leave money on the table.

Know Your Timeline

Foreclosure doesn't happen overnight. You have time to explore alternatives like loan modifications, short sales, or deeds-in-lieu. Understanding your state's foreclosure process gives you power.

What If Foreclosure Does Happen?

Look, sometimes despite your best efforts, foreclosure happens. Life throws curveballs. Medical emergencies, job losses, divorces: things happen that are beyond our control.

If you do lose your home to foreclosure, here's something important you need to know: you might still be owed money.

When a foreclosed property sells at auction for more than what was owed on the mortgage, that extra money is called surplus funds: and it legally belongs to you, the former homeowner.

We've seen families owed $10,000, $30,000, even $50,000 or more in surplus funds and they had no idea. Florida alone has over $250 million in unclaimed foreclosure surplus sitting with county clerks right now.

Don't walk away without checking. Here's how to tell if you're owed surplus funds.

At Heritage Surplus Solutions, this is exactly what we do. We help families recover the money that's rightfully theirs after foreclosure: with compassion, transparency, and zero upfront fees. If you'd like to learn more, visit our website or grab our free ebook to get started.

Looking Ahead

Real estate experts are predicting that 2026 will be a more stable year for the Southeast housing market. Inventory is rising, price growth is settling into more sustainable ranges, and the initial wave of post-pandemic foreclosures is working its way through the system.

But stability doesn't mean we're out of the woods: especially with insurance costs and interest rates still squeezing homeowners.

The best thing you can do right now is stay informed, know your options, and don't be afraid to ask for help.

We're here for you, every step of the way.

Have questions about foreclosure, surplus funds, or what comes next? Reach out to us (we'd love to help)