Foreclosures, Flow of Capital, and the Real Economy

By Connor Caro

If you want to understand where the economy is heading, don’t just watch the stock market…watch real estate. More specifically, watch foreclosures.

At 10M, we don’t look at foreclosure data as headlines. We look at it as signals. Signals that impact investors, business owners, job creators, and entire local economies. And right now, the signal is clear.

The Data: A Market Shifting, Not Crashing

Foreclosure filings rose 20% year over year in February 2026, marking the 12th consecutive month of annual increases. That’s not a blip…that’s a trend.

There were 38,840 properties with foreclosure filings in February alone. While that’s down slightly month-over-month (4% from January), the year-over-year growth is what matters.

Nationally, 1 in every 3,701 housing units had a foreclosure filing. Now here’s the key:

This is not a collapse. This is normalization.

We came out of a period during COVID where foreclosure activity was artificially suppressed. What we’re seeing now is the market recalibrating, but not evenly.

Where the Pressure Is Building

Not all markets are created equal. Some states are feeling this shift far more aggressively:

• Indiana: 1 in every 1,597 units (double the national average)

• South Carolina: 1 in every 2,217

• Florida: 1 in every 2,277

• Illinois, Delaware, New Jersey, Texas—all showing elevated distress levels

Meanwhile, states like West Virginia and Vermont remain extremely stable. This matters for our members because distress is localized, and opportunity is too.

Why This Is Happening (And Why It Matters to Business)

Let’s break this down beyond real estate. This isn’t just about homeowners missing payments. This is about:

• Rising insurance costs (especially in states like Florida)

• Increased cost of living

• Higher HOA/condo fees

• Interest rate pressure from recent years

• Overpaying during the pandemic boom

In Florida, for example, people bought at peak prices with ultra-low rates. Now:

• Property values in some areas have softened

• Insurance premiums have surged

• Structural regulations have increased costs

The result? Owners are squeezed from every angle.

And when homeowners get squeezed, local economies follow.

The Business Impact: This Is Bigger Than Housing

Real estate is not just an asset class. It’s the backbone of economic movement. When foreclosure activity rises, it impacts:

• Construction companies (less renovation, stalled projects)

• Retail and service businesses (less disposable income in distressed areas)

• Local employment (real estate downturns slow hiring and expansion)

• Municipal budgets (lower property values = lower tax revenue)

At 10M, we always say:

When real estate shifts, everything shifts. This is why our business members need to pay just as much attention as our investors.

The Opportunity Side (Because There Always Is One)

Let’s talk about what this means for our investors. There were:

• 25,928 foreclosure starts in February (up 14% year over year)

• 4,077 completed foreclosures (REOs) (up 35% year over year)

That’s inventory entering the market. But here’s the truth most people don’t say: Foreclosures are not easy deals. Most are:

• Sold as-is

• Carry deferred maintenance

• May include liens or back taxes

• Require capital and experience

And here’s the kicker, sometimes they don’t even win on price. In many markets, new construction is beating foreclosures because builders are:

• Buying down interest rates

• Covering closing costs

• Offering warranties

So the math has to work. Not just the price.

What This Means for 10M Members

For our investors: This is where strategy matters more than ever. Not every foreclosure is a deal but the right ones are wealth creators.

For our business members: You need to understand where your customers are under pressure. Because distress in housing becomes hesitation in spending. For all of us: This is a moment to pay attention, not panic.

Final Thought: Follow the Stress, Find the Opportunity

The market is not collapsing, it’s rebalancing.

But within that rebalancing, there are pockets of stress. And wherever there is stress, there is movement. And wherever there is movemet…

there is opportunity.

At 10M, we don’t chase headlines.

We follow data.

We understand cycles.

And we position ourselves ahead of them.

Because real estate doesn’t just reflect the economy…

It drives it.