New Jersey's Foreclosure Comeback Tour Nobody Asked For
From the halcyon days of 3% mortgages to pandemic bailouts to a full-blown foreclosure surge — the Garden State's housing market has been on quite a ride
Let’s take a trip down memory lane. Picture it: 2019. Mortgage rates hovering around a dreamy 3.5%. Buyers lining up around the block for open houses. Bidding wars so fierce you half-expected someone to offer a kidney. New Jersey’s housing market was, in a word, cooking.
Then a global pandemic walked in uninvited, sat down on the couch, and proceeded to completely rearrange the furniture. It was giving lab-to-table decor — farm to fork but make it Wuhan, with exposed brick, questionable ventilation, and a bat somewhere in the supply chain.
151,153
Foreclosure filings nationwide in 2021 — a 16-year low
219%
Surge in filings in first half of 2022 after relief expired
#6
NJ’s rank for worst foreclosure rate in the nation in 2025
The good old days (briefly)
Before COVID turned everyone into a sourdough baker with a Zoom background, New Jersey’s real estate market was riding a steady wave of growth. From 2015 through 2019, the state saw healthy annual price appreciation of 3–5%, supported by stable economic conditions and relatively low interest rates. It wasn’t flashy, but it worked.
Then the pandemic hit — and counterintuitively, the housing market didn’t crash. It exploded. Mortgage rates fell to historic lows, remote work untethered buyers from city offices, and suddenly everyone needed a home office, a yard, and preferably a guest room for relatives they’d be pretending not to see for the next two years. In the New York–New Jersey metro area, home prices shot up by 30% or more in many areas. The average price of existing homes in New Jersey rose more than 20% in just the first year of the pandemic alone.
"Ultra-low mortgage rates fueled a home buying frenzy" — and New Jersey showed up to the party in full force.
The great foreclosure disappearing act (2020–2021)
Here’s where the government decided to play superhero. In order to protect distressed homeowners from the economic devastation of COVID-19, federal regulators rolled out a sweeping arsenal of relief measures: foreclosure moratoriums, eviction freezes, and forbearance programs that allowed borrowers to pause their mortgage payments without penalty.
The result? Foreclosures basically ceased to exist. According to ATTOM data, there were just 151,153 foreclosure filings nationwide in 2021 — a 29% decrease from 2020, and the lowest number recorded in at least 16 years. In other words: banks had billions of dollars in delinquent mortgages on their books and were legally unable to do much about it. The foreclosure pipeline went from a river to a puddle.
Think of it like a pressure cooker. The government turned the heat all the way down and sealed the lid. Everything was calm. Everything was fine. What could possibly go wrong?
During COVID, the government essentially said, "don't worry, you can pause your mortgage payments!" Which was genuinely helpful — unless you were one of the politicians or bankers quietly scooping up distressed properties at a discount while the rest of us were obsessing over ‘stand 6 feet away’ stickers at every block. Can't time the market, but apparently if you make the rules you don't have to.
The lid comes off (2022 and beyond)
At the end of 2021, the relief programs expired. And — surprise — the foreclosure pipeline did not quietly resume normal operations. It erupted. Foreclosure filings surged 219% in the first half of 2022 alone as lenders moved quickly to process the backlog that had been building for two years. Everyone was still surprised somehow.
The upward march has continued since. Nationally, foreclosure filings rose 14% in 2025 compared to 2024, with 367,460 properties affected — though experts note this is still down 25% from pre-pandemic 2019 levels, and down a staggering 87% from the 2010 peak of nearly 2.9 million filings.
New Jersey: always overachieving
If the rest of the country is raising the foreclosure bar, New Jersey is clearing it with room to spare — and then asking for a participation trophy.
The Garden State has long been one of the worst states in the nation for foreclosure activity, and 2025 was no exception. According to ATTOM’s Year-End 2025 U.S. Foreclosure Market Report, New Jersey recorded the sixth highest foreclosure rate in the nation for the full year, with one in every 273 housing units carrying a foreclosure filing. To put that in perspective, that’s worse than Indiana, Ohio, Texas, and Maryland — states that are not exactly known for their booming economies. In December 2025 specifically, New Jersey topped the entire country, recording the single highest foreclosure rate of any state — one in every 1,734 housing units. The Garden State: always finding new ways to be number one when you least want it.
2019: Pre-pandemic baseline — steady market, low rates, normal foreclosure activity.
2020: COVID hits. Federal moratoriums and forbearance programs freeze the foreclosure pipeline.
2021: 151,153 filings nationwide — lowest in 16 years. NJ housing prices up 20%+ in one year.
2022: Relief expires. Filings surge 219% in H1 2022. The pressure cooker opens.
2024: NJ ties Florida for highest foreclosure rate in the nation — one in every 267 housing units.
2025: NJ ranks 6th worst nationally. Atlantic City among worst metros in the entire US. December: NJ holds #1 worst rate in the country.
Atlantic City deserves its own paragraph. Among the 225 largest metro areas in the United States, Atlantic City posted one of the worst foreclosure rates in 2025 — one in every 192 housing units. That’s not a typo. Meanwhile, North Jersey counties are seeing dramatic year-over-year spikes, with Morris County up 50%, Sussex County up 37%, and Bergen County up 30% in 2025 compared to 2024.
Why is New Jersey perpetually near the top of this list? A few reasons converge at once: sky-high property taxes, some of the most expensive real estate in the country, a notoriously long and slow court-supervised foreclosure process that creates a massive backlog, and the long tail of pandemic-era forbearance agreements that have finally run their course. Oh, and adjustable-rate mortgage holders who bet that rates would drop quickly and are still waiting.
New Jersey's foreclosure process is so long, some of these properties have been in the pipeline longer than some marriages.
What this means for the market right now
Before you panic: ATTOM CEO Rob Barber noted that today’s uptick “is being driven more by market recalibration than widespread homeowner distress, with strong equity positions and more disciplined lending continuing to limit risk.” In plain English: this isn’t 2008. Most homeowners who built equity during the pandemic boom still have a cushion. The foreclosures happening now are more concentrated — legacy cases, overleveraged buyers, and forbearance fatigue — not a systemic collapse.
That said, for distressed homeowners, the situation is real and urgent. If you’re behind on payments, the time to act is now — not after the notice arrives. Options exist- loan modifications, short sales, deed-in-lieu agreements, and HUD-approved counselors who can help navigate the process before it’s too late.
And for savvy investors and specialized real estate professionals? The growing foreclosure inventory in New Jersey represents one of the most significant opportunity windows in years. REO listings are moving. Asset managers are busy. The distressed property market is, for better or worse, back.
Sources
ATTOM Data Solutions — Year-End 2025 U.S. Foreclosure Market Report (January 2026)
ATTOM Data Solutions — Mid-Year 2025 U.S. Foreclosure Market Report (July 2025)
ROI-NJ — “U.S., N.J. Foreclosure Activity Increased in 2025” (January 2026)
NJBIA — “Foreclosure Activity Increases in 2025” (January 2026)
NJBIA — “Foreclosure Filings Up in NJ, US” (February 2024)
Law Offices of James C. Zimmermann — “Foreclosures Rising Throughout New Jersey in 2025”
BlueHub Capital — “2024 Foreclosure Rate Update”
Federal Reserve Bank of New York — “A Look at the NY–NJ Region’s Pandemic Housing Boom”
Rutgers State Policy Lab — “Has New Jersey’s Housing Market Peaked?”
ResiMpli — “175+ Foreclosure Statistics for 2025”
Victoria Devino has an MBA, runs a New Jersey real estate brokerage, and holds more certifications than she has patience for people who don’t read the fine print. Short sales, foreclosures, investments — she’s done it all, and she’s seen enough to know that what you read in the headlines is usually the watered-down version.
That’s why she created The Jersey Insider. Part real estate intel, part unfiltered New Jersey news, part “somebody had to say it” — it’s the resource she wished existed when she started out. Featured in Apple News and invited onto multiple podcasts, Victoria has built more than one successful business and isn’t shy about sharing what she’s learned along the way.
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