Southwest Florida's Foreclosure Rates and Rising Insurance Costs
Southwest Florida holds the unfortunate distinction of leading the nation in foreclosure rates, according to recent data from ATTOM, a real estate analytics firm. Charlotte County reported the highest foreclosure rate among U.S. metropolitan areas in the first half of 2026, with Lee County following closely in sixth place. A separate study ranked Lee County even higher than Charlotte for foreclosures during the same timeframe.
The increase in foreclosures occurs amidst a rapidly changing housing market in Southwest Florida, marked by fewer building permits and some of the highest insurance costs in the country. Joel Berner, a senior economist at Realtor.com, highlighted the rising homeowners insurance premiums due to climate concerns and the increasing costs of home repairs. Consequently, more homeowners are struggling to meet their mortgage obligations, leading to higher default rates.
According to Rob Barber, CEO of ATTOM, foreclosure activity has continued to rise in 2026, indicating that homeowners in Florida may be facing more severe financial challenges compared to the previous year. Charlotte County, part of the Punta Gorda metro area, had foreclosure filings on 0.5% of housing units, a rate more than triple the national average.
Lee County, identified as the Cape Coral metro area, also reported a significant foreclosure rate with filings on 0.35% of housing units. This rate is more than twice the national average. Homeinc's analysis presented similar findings, noting that Lee County had 8.4 filings per 1,000 housing units, slightly above Charlotte County's 8. Factors such as high insurance rates, post-hurricane recovery pressures, and the end of federal COVID mortgage relief programs have been cited as contributors.
Moreover, Florida has a high percentage of second-home and short-term-rental investor ownership, which can influence foreclosure rates. Collier County, for instance, leads with 25% of its housing stock held by investors. Such properties are often quickly abandoned when they underperform, exacerbating foreclosure trends.
Despite the current challenges, Southwest Florida's foreclosure rates remain below the levels seen during the housing crisis of the early 2000s. Homeowner equity levels are healthier, with only about 3.2% of mortgaged homes nationwide deemed underwater in the first quarter of 2026.
The shifting market conditions in Southwest Florida serve as a reminder of the broader economic challenges facing homeowners, including affordability issues, rising borrowing costs, and increased ownership expenses. This dynamic situation underscores the need for continued vigilance as the region adapts to these evolving circumstances. Homeinc predicts that Florida's foreclosure filings will remain elevated through the end of the year.