In the second quarter of 2025, zombie foreclosures rose to 3.3%, with over 7,300 abandoned properties identified. ATTOM's report highlights that pre-foreclosure homes are increasingly left vacant, particularly in the South and Midwest. This trend, stemming from low property values, suggests homeowners are walking away from low-equity properties. The report indicates areas in states like North Carolina, Iowa, and Texas have seen significant increases in zombie properties, which negatively impact neighborhood property values and point to broader market health issues.
Many counties in these states are rural areas, where the property values tend to be low. So many homeowners may choose to simply walk away from these low-equity properties instead of having incentive to negotiate new payment plans.
Meanwhile, in low-value areas, the cost of foreclosing, maintaining, and reselling a home may exceed its market value. As a result, lenders may abandon the foreclosure process midway to avoid responsibility, leaving homes vacant and prone to deterioration.
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