Several Midwestern metro areas now have zombie foreclosure rates exceeding three times the national average, as thousands of abandoned homes drag down property values and invite decay across neighborhoods from Ohio to Indiana.
Property data firm ATTOM found 8,482 so-called zombie properties sitting empty across the country during the third quarter of 2026, homes whose owners walked away after receiving a default notice but before a bank ever finished the foreclosure. Youngstown, Ohio, topped the list at 12.1 percent, followed by Cedar Rapids, Iowa, at 11.6 percent, Baltimore at 11.5 percent, Fort Wayne, Indiana, at 11.1 percent, and Akron, Ohio, at 10.5 percent. The national rate stands at 3.3 percent.
The numbers come from ATTOM's quarterly analysis of 140 metro areas, each containing at least 100,000 residential properties and 50 or more homes in the foreclosure pipeline. Out of 259,666 homes in foreclosure nationwide, roughly one in thirty had been abandoned by their owners, left to deteriorate while lenders stalled on completing the legal process.
The mechanics are straightforward and damaging. NestCash founder John Carter explained the trap to Realtor.com:
"An owner gets a notice of default, believes the bank now owns the house, and moves out. But the lender never actually completes the foreclosure."
The result is a property stuck in legal limbo. The owner thinks the bank is responsible. The bank has decided the home is not worth the cost of foreclosing, maintaining, and clearing outstanding debts. Nobody mows the lawn. Nobody fixes the roof. Nobody boards the windows. And the house begins to rot.
Carter put the downstream effect bluntly:
"An abandoned house drags down everything around it."
That is not an abstraction for the homeowners next door. Overgrown yards, unrepaired damage, vandalism, squatting, and fire risk all follow abandonment. For families who kept paying their mortgages and maintained their properties, a zombie house on the block means lower appraisals and a harder time selling, a penalty imposed by someone else's default and a lender's indifference.
Ohio carried the largest raw total of zombie properties of any state in the analysis, with 602 homes sitting abandoned in foreclosure. That figure actually dropped 10.8 percent from the prior quarter, but the state's concentration in legacy industrial cities kept it at the top. Youngstown's 12.1 percent zombie rate and Akron's 10.5 percent rate both dwarf the 3.3 percent national figure by wide margins.
Indiana followed a different trajectory. The state's zombie count climbed 17 percent quarter over quarter, reaching 344 properties. Fort Wayne cracked the top five metro list, and two Indianapolis ZIP codes recorded zombie rates of 34.1 percent and 32.6 percent, meaning roughly one in three foreclosure-stage homes in those areas had been abandoned. Indiana also posted the highest investor-owned vacancy rate in the country at 7 percent.
Kentucky saw the sharpest percentage jump among states with at least 50 zombie properties, surging 56.8 percent to 58 homes. Colorado rose 30.1 percent to 95, Arizona climbed 19.4 percent to 86, and Maryland, home to Baltimore's 11.5 percent metro rate, increased 18.9 percent to 151.
On the other side, Georgia dropped 22.8 percent to 78 zombie homes, Texas fell 17.4 percent to 166, Minnesota declined 10 percent to 54, and California decreased 8 percent to 298. Zombie properties rose in 21 states between the second and third quarters of 2026.
The metro-level numbers mask sharper concentrations at the ZIP-code level. A single St. Petersburg, Florida, ZIP code, 33708, recorded a zombie rate of 38.3 percent, the highest in the country. Alamogordo, New Mexico, followed at 36.7 percent. The two Indianapolis ZIP codes rounded out the worst four.
At the other extreme, Bridgeport, Connecticut, and Huntsville, Alabama, both posted zombie rates of zero. Trenton, New Jersey, came in at 0.1 percent. Provo, Utah, registered 0.2 percent, and Atlantic City, New Jersey, sat at 0.4 percent.
The gap between the best and worst markets is enormous. A homeowner in Provo faces virtually no risk of living next to an abandoned foreclosure. A homeowner in Youngstown faces a one-in-eight chance that any foreclosure-stage property on the block has already been left to decay.
ATTOM's data also captured overall vacancy rates and a separate measure for properties held by institutional investors. Nationally, 1.3 percent of the country's 104.6 million residential properties sat vacant in the third quarter. Nineteen states kept their vacancy rates below 1 percent. New Hampshire posted the lowest at 0.3 percent, followed by Vermont at 0.4 percent and a three-way tie among New Jersey, Connecticut, and Idaho at 0.5 percent.
Oklahoma and Kansas tied for the highest overall vacancy rate at 2.4 percent, followed by Alabama at 2.2 percent and a tie between West Virginia and Missouri at 2.1 percent.
Institutional investors owned 24.9 million residential properties. Of those, 879,532 sat empty, a vacancy rate of 3.5 percent, more than double the national average. Indiana again led at 7 percent, followed by Illinois at 6.2 percent, Oklahoma at 6 percent, and Kansas and Alabama tied at 5.9 percent.
ATTOM CEO Rob Barber offered context on the broader market:
"It remains very hard to find an empty home for prospective buyers in most regions."
That scarcity keeps prices elevated for buyers while nearly 880,000 investor-held homes collect dust. The national vacancy rate of 1.3 percent is low by historical standards, but the investor vacancy rate running at nearly triple that figure raises a fair question about whether large-scale ownership is serving the housing market or warehousing supply.
Carter stressed that owners facing default have more leverage than many realize. A notice of default does not transfer ownership. Homeowners can pursue loan modification, reinstatement, a short sale, or an outright sale before the foreclosure process concludes.
Carter put it plainly:
"A default notice is the start of a process, not the end of your ownership."
Realtor Greg Field told Realtor.com that zombie properties are generally better suited to experienced, cash-rich investors than first-time buyers looking for a straightforward home. The condition of these houses, often left open to the elements for months or years, makes them poor candidates for conventional financing and standard inspections.
The national zombie rate edged down from 3.4 percent in both the prior quarter and the same quarter a year earlier. That marginal improvement offers little comfort to the specific communities absorbing the damage. A one-tenth-of-a-percentage-point decline nationally does nothing for a block in Youngstown or a ZIP code in Indianapolis where a third of foreclosure-stage homes sit empty.
When lenders decide a property is not worth the cost of foreclosing, they leave the mess for neighbors, local governments, and the surrounding market to absorb. The homeowner who walked away carries the legal liability. The bank holds the leverage. And the family next door watches their home lose value one overgrown yard at a time. That is not a market failure anyone voted for, it is the quiet cost of a system that lets institutions walk away from consequences while ordinary homeowners cannot.
