Zombie Foreclosures Spike in Midwestern Cities

The prevalence of "zombie" properties, defined as homes abandoned by owners before foreclosure proceedings are finalized, remains a significant issue, with a recent report indicating higher rates in several Midwestern cities compared to the national average. According to Attom, a provider of property data and AI-powered analytics, 3.3% of homes in the foreclosure process were vacant and abandoned by their owners in the third quarter of 2026. This national figure represents a slight decline but masks considerable regional disparities.

Attom's analysis focused on 140 cities with at least 100,000 residential properties and a minimum of 50 properties undergoing foreclosure. The cities exhibiting the highest "zombie" foreclosure rates were Youngstown, Ohio, where 12.1% of foreclosed homes were vacant; Cedar Rapids, Iowa, with 11.6%; Baltimore, Maryland, at 11.5%; Fort Wayne, Indiana, at 11.1%; and Akron, Ohio, with 10.5%. These figures highlight a concentration of this housing problem in the Midwest.

John Carter, founder of NestCash, explained to Realtor.com® that "zombie" properties often arise from a disconnect between a homeowner's perception and the lender's actions. Homeowners may vacate a property after receiving a notice of default, assuming the bank has taken possession. However, the foreclosure process may not be completed by the lender, sometimes due to the property's value being less than the costs associated with foreclosure, title acquisition, and maintenance. This gap leaves the property in a state of limbo, technically still in the name of an absentee owner.

The consequences of these vacant and unmaintained properties extend to their surrounding neighborhoods. "Zombie" homes can deteriorate, becoming eyesores and potentially impacting property values. Furthermore, they continue to accrue property taxes under the absentee owner's name, creating administrative burdens. The Attom report also noted that 1.3% of all residential properties in the U.S. were vacant in the third quarter of 2026, a figure consistent with the preceding quarter and the same period in 2025. The United States has a total of 104.6 million residential properties, underscoring the scale of the housing market within which these "zombie" foreclosures operate.