Why Foreclosures Filings Are Rising in Tourist-Haven States

In July of 2025, nearly 36,130 properties across the U.S. were hit with foreclosure filings, a 13% spike year-over-year and the sharpest annual increase in 2025, according to ATTOM’s latest housing report.

Fast forward to April 2026, and the data has officially validated that warning. We have now seen 14 consecutive months of increases in foreclosures. By March 2026, monthly filings surged to 45,921 properties, representing a sharp 28% increase from a year ago.

Updated on April 28, 2026.

By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).

This is an Expert Opinion and Economic Analysis.

Key Takeaways: The 2026 Housing & Tourism Crisis

• 14 Months of Sustained Growth: Foreclosure filings have increased every month since early 2025. As of March 2026, monthly filings hit 45,921 properties, a 28% increase year-over-year.
• Florida’s Foreclosure Crisis: Florida now holds the #3 worst foreclosure rate in the U.S. (1 in 750 units). The nation’s two highest foreclosure rates are concentrated in Florida: Lakeland (1 in 409) and Punta Gorda (1 in 416).
• The Tourismphobia Effect: Canadian tourism to the U.S. has plunged 25% compared to the 2023-2024 average. Florida alone lost approximately 500,000 Canadian visitors in 2025, with air travel from Canada to Miami and Fort Lauderdale down by as much as 35%.
• Legal & Civil Deterrents: The implementation of CBP Directive 3340-049B in January 2026 has codified “Advanced” device searches, contributing to a broader withdrawal from the consumption economy and tourism.
• The Bird Pond Stagnation: The U.S. economy is shifting from a state of healthy circulation to a “Great Stagnation” as consumers hold back on non-essential items and expenses.

Tourism-Driven Economies Are Cracking and Increasing Foreclosure Filings

Originally, this article concluded that Nevada led the nation in foreclosure filings, with 1 in every 2,326 homes facing default. My home state of Florida followed closely at 1 in every 2,420 units, trailed by Maryland, South Carolina, and Illinois. But the numbers only tell part of the story.

As I’ve previously argued on Bankruptcy.blog and in my YouTube commentary, the U.S. is experiencing a chilling effect on inbound tourism, which is being called tourismphobia. There’s also the boycotting of the U.S. (ABUSA)– Anything but the USA.

I argued then that this was the start of a “snowball effect” that would only worsen as tourism revenue dried up.

Florida’s Descent: Florida has moved from being “close behind” Nevada to being the #3 worst state in the nation for foreclosure rates, with 1 in every 750 units facing a filing in the first quarter of 2026.

The two worst foreclosure rates in the entire country are now both in Florida: Lakeland (1 in 409) and Punta Gorda (1 in 416). Florida’s foreclosure woes mirror its tourism slump. In 2025, Naples, a haven for Canadian snowbirds, saw a 19.4% drop in Canadian visitors. Miami and Fort Lauderdale have also seen steep declines in Canadian air travel, down 20% to 35% depending on the route.

As of April 2026, that trend has not reversed. Miami and Fort Lauderdale are still experiencing a decline in Canadian air travel. Recent estimates show Florida lost approximately 500,000 Canadian tourists in 2025 alone.

Leaving Las Vegas

In 2025, Las Vegas, the economic engine of Nevada, saw the third-highest foreclosure rate among major metros, 1 in every 1,914 homes.  While Sheryl Crow famously sang about standing in the middle of the desert waiting for her ship to come in, for many in Nevada and Florida, the ships are sailing elsewhere.

The causes remain a toxic mix of tariffs and a weak Canadian dollar, but the deeper issue is sentiment. International travelers are increasingly choosing Mexico, Europe, or domestic alternatives. While U.S. inbound tourism has decreased, travel to Canada has boomed!

It isn’t always a question of affordability; it’s a question of where they feel welcomed. When the “welcome mat” is replaced by border friction and trade wars, money follows the path of least resistance.

The U.S.-Canada Trade Wars

The tariff wars with Canada are in part responsible for the sharp and sustained decline in visitors to U.S. destinations like Las Vegas, Miami, and Naples.

Travel warnings issued by European nations, including Germany, France, and the UK, citing political instability and entry risks, aren’t helping. The same applies to foreign students leaving the U.S. or not applying to American universities, as they are recruited by other countries.

The 2026 Validation: The “sharp decline” in tourism has now been confirmed. As of April 2026, Canadian visits to the U.S. have plunged by 25% compared to the 2023-2024 average.

In Florida cities like Miami and Naples, air travel from Canada is decreased by as much as 35%. But Canadians aren’t staying home; they are seeking other destinations overseas such as Europe and Mexico, which is above by more than 11%.

The Florida Triple Whammy: Why the Market is Frozen

In Florida, we are facing a “Triple Whammy” that has turned the Sunshine State into the coldest real estate market in the country:

The Insurance Crisis: Home insurance has moved past “expensive” and into “unaffordable.” Regardless of the political debates over climate change, the insurance industry has made its decision based on the math of recent hurricanes. Many homeowners are finding that their insurance premiums now rival their mortgage payments.

The Condo Assessments: Following the tragic collapse in Surfside, building codes were revamped, resulting in “special assessments” as high as several hundred thousand dollars, leaving condo owners with an underwater mortgage almost overnight.

Florida’s answer? Eliminate property taxes. In early 2026, the Florida House passed HJR 203, which would phase out the non-school portion of property taxes. But this raises a simple question: if tax revenue is gone, how are government services paid for?

Property taxes fund local government. Without property tax revenue, local governments would be forced to choose between massive layoffs for teachers, police officers, and firefighters, or increasing sales tax.

For the Florida homeowner, whatever is gained without property taxes will be lost to sales taxes, plus a lack of basic government services. When I referenced the “Cubanization” of our economy, I was referring to economic survival because of necessity, not purposefully caused.

Burner Phones and Border Searches

In 2025, I raised the alarm about U.S. citizens and lawyers being stopped for phone checks by Customs and Border Patrol. In January of 2026, CBP Directive 3340-049B codifies these searches.

The directive now distinguishes between “Basic” and “Advanced” searches, the latter allowing officers to use external equipment to copy and analyze data if they have “reasonable suspicion.”

What worries me as a lawyer and law professor is that allowing CBP to review emails of clients is a violation of the attorney-client privilege and could lead to a malpractice lawsuit and disbarment.

Reports do indicate that CBP has said to skip the emails regarding clients, which would take hours to do. But that’s the point, isn’t it? Keep someone there for hours until they give in. Generally, reviewing lawyer emails requires a court order, and judges appoint a special magistrate to separate work product.

The Impossible Choice: If you refuse, you face arrest and potential disbarment for “obstructing” a federal agent. If you comply, you risk malpractice lawsuits and disbarment for failing to protect your clients.

This isn’t just a “security” measure; it’s a deterrent contributing to the very billions in lost revenue we are seeing today.

The Economic Cost: Why This Affects Us All

The economy isn’t just a collection of data. It is a series of individual decisions that affect the economy.

Our dog, Bella, passed away in 2025. In the past, my mother would dog-sit for us during major trips, but she passed away nearly three years ago. Without that support system, our travel shifted almost exclusively to camping. Now, without Bella, we technically have the opportunity to take the trips we previously couldn’t, like a cruise.

But we aren’t going. And that is the problem. When I choose not to take that cruise just because of CBP, I am withdrawing money from the system. For a country that depends so heavily on consumption, that choice, multiplied by millions of households, is felt economically.

The Financial Consequences

Why bother visiting a country where your personal privacy is violated? As a bankruptcy lawyer, my concerns aren’t just about a social media post; it’s about the legal and financial consequences that follow.

The conversation around ICE arrests or border detentions often ignores the most practical question: Who pays the bills while you are locked up?

The Credit Collapse: If a person is detained for weeks, their mortgage goes unpaid, their car note defaults, and their credit score is shredded.

The Financial Impact of Legal Fees: Any savings meant for consumption, whether a cruise, that new car, that home repair, are immediately diverted to legal fees.

We are effectively forcing travelers and citizens alike to choose between their civil liberties and their financial survival.

The Bird Pond Economy

I often compare the economy to my bird pond. Water is a paradox: when it is moving, it is a powerful force that gives life to everything it touches. But when that same water becomes stagnant, it becomes equally powerful in the opposite direction. It breeds decay and eventually kills the very life it once supported.

Money operates by the same laws. When it circulates, the economy thrives. When people “hold back” out of fear, anxiety, or a sense of being unwelcome, the “pond” turns stagnant. In 2026, we are seeing the beginning of a Great Stagnation.

What Comes Next?

This isn’t just a tourism story; it’s the snowball effect I’ve been arguing for months. When tourism dries up, jobs vanish, home values fall, and mortgage defaults rise. It’s all tied in together, and the start of 2026 confirms this.

The U.S. housing market in tourism-reliant cities is feeling the effects of a global tariff war, political and financial uncertainty. The firing of Dr. Erika McEntarfer, the Bureau of Labor Statistics (BLS) chief, is an example of uncertainty. When the integrity of economic data is questioned, the markets react.

If “tourismphobia” continues to spread, we may see more cities like Las Vegas and Naples become case studies in how politics affects the U.S. economy, something we haven’t experienced in our lifetimes. But, to quote Sheryl Crow one more time, this is becoming our new normal.

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