Zombie Foreclosures Are Rising—These Midwest Metros Are Hardest Hit

Lurking behind a for sale sign could be a home sitting empty. Not because the homeowners already moved out but because the property is vacant due to foreclosure.

Nearly 1.4 million homes were vacant at the beginning of the year, according to ATTOM, a provider of property data and real estate analytics.

ATTOM released its first-quarter 2026 Vacant Property and Zombie Foreclosure Report, which found that out of the nation's nearly 104.8 million residential properties, at least 230,401 were in the process of foreclosure (at the time of its report).

Out of those properties, at least 7,540 were considered "zombies"—meaning their owners had abandoned them before the end of the foreclosure proceedings.

The silver lining is that the zombie rate of 3.27% in the first quarter of 2026 is down slightly from 3.34% during the same time in 2025.

"It will come as no surprise to anyone shopping for a home that vacancy rates remain low. That is one reason home prices have continued to rise despite ongoing affordability challenges," said Rob Barber, CEO of ATTOM. "It is also encouraging for both neighborhoods and the broader market that even among properties in foreclosure, vacancy rates remain relatively low."

Foreclosure hotbeds

ATTOM's data found of the 27 metropolitan areas studied—meaning those that had at least 100,000 total residential properties and 50 or more properties in the foreclosure process that are vacant—the highest zombie rates were in Cleveland (9.9%); Baltimore (9.3%); St. Louis, MO (8.6%); Akron, OH (7.4%); and Indianapolis, IN (6.5%).

These zombie homes can have an effect on the housing markets.

“ATTOM’s data doesn’t pinpoint the local nuances behind why certain metros stand out, but in parts of the Midwest it likely reflects a mix of older housing stock, slower demand in some neighborhoods, and ownership or equity situations that make distressed owners more likely to walk away early," Barber tells Realtor.com®. "Those conditions can increase the chances that a foreclosure becomes a zombie, even though overall zombie rates remain low nationally.”

"Even in markets with relatively low foreclosure rates, a handful of zombie properties can still cast a long shadow on surrounding neighborhoods," explains Hannah Jones, senior economic research analyst at Realtor.com. "Vacant homes that aren’t maintained can depress buyer interest and price expectations on nearby blocks, possibly weighing on home values."

Overall, the states with the highest overall home vacancy rates were Oklahoma (2.4%), Kansas (2.4%), Alabama (2.2%), Missouri (2.1%), and West Virginia (2.1%).

Institutional investors

When it comes to zombie foreclosures, ATTOM reveals that properties owned by institutional investors, rather than individual owners, were more likely to be vacant.

Of the roughly 25.2 million institutional investor-owned homes, about 3.5% were vacant.

The states with the highest vacancy rates for investor-owned properties were Indiana (7.2%), Illinois (6.2%), Alabama (6%), Kansas (6%), and Oklahoma (5.9%).

Lowest zombie foreclosures

Not all areas are affected by an increase in zombie foreclosures.

ATTOM data identified the metro areas with the lowest zombie foreclosure rates: New York City (1.6%); Philadelphia (1.7%); Los Angeles (2.2%); Orlando, FL (2.2%); and Lakeland, FL (2.4%).

The lowest vacancy rates were in New Hampshire (0.3%), Vermont (0.4%), New Jersey (0.5%), Connecticut (0.5%), and Idaho (0.6%).

Investor-owned properties with the lowest vacancy rates were located in New Hampshire (0.8%), Vermont (1%), Idaho (1.3%), North Dakota (1.5%), and Maine (1.5%).

“There are many situations that may end up in a zombie foreclosure, including homeowners misunderstanding the foreclosure process, facing prolonged timelines that create uncertainty, or dealing with properties that have little equity or require significant repairs," Barber says. "In those cases, owners may disengage early, increasing the likelihood a home is abandoned before the foreclosure is completed.”