One symptom of the quickly slowing Dallas-Fort Worth housing market? More foreclosures.

The cooling housing market may be welcome to unsuccessful Dallas-Fort Worth homebuyers, but these changes are already hurting local homeowners facing foreclosure.

Foreclosures are up from 177 postings in July to 246 postings in August in Tarrant County, a 39% month-over-month increase. From this time last year, foreclosures have increased fourfold in Tarrant County, according to McKinney-based real estate data firm Foreclosure Listing Service.

Foreclosures are also spiking throughout the Metroplex. In Dallas County, foreclosures increased by 41% between July and August.

Foreclosure Listing Service COO Curtis Roddy attributes the foreclosure surge to two factors: the end of the federal protections against evictions and foreclosures and the cooling of the housing market.

It was easier to avoid auction when the market was so hot, because homeowners facing foreclosure could often sell before the auction deadline.

“There was no reason for someone to go through the foreclosure process,” Roddy said. “Now houses are sitting on the market ... We’re not seeing that liquidity.”

Prior to the coronavirus pandemic, North Texas counties would see about 350 to 400 foreclosures postings each month. Roddy expects to see foreclosures continue to climb.

“I think at the end of the day, we’re getting back to normal,” he said.

For some homeowners, returning to pre-pandemic “normal,” means housing insecurity and displacement.

A healthy or “normal” housing market “should not be at the expense of people on the margins,” said Christina Rosales, housing and land justice director at community organizing network PowerSwitch Action.

“Foreclosure means that families are ripped from their communities, that kids are ripped from their schools,” Rosales said. “And it has downstream effects. It affects their credit. It affects their ability to hold down a job. It affects academic achievement for kids. Their mental health, their physical health. It’s a big dent in their ability to find future housing.”

Families experiencing foreclosure often struggle to get approved for rental housing and may seek housing at extended-stay hotels.

The spike in foreclosures could also lead to an increase in investor-owned properties, said Rosales.

When homes go to auctions, “there’s no protection that kept the house or property in normal people’s hands,” she said. “That house might end up getting scooped up by investors who had the cash to put down immediately.”

In 2021, one in two homes purchased in Tarrant County was bought by a company or corporation, according to a report from the National Association of Realtors. And that’s prior to the increase in foreclosures.

According to a Realtor survey, of homes purchased by institutional buyers, 42% were converted to single-family rentals and 45% were flipped and resold. That’s in part because 42% of homes sold to institutional buyers were reported as being in need of repair.

The increase in institutional homeowners “distorts the housing market,” said Rosales. “It distorts people’s ability to put down roots and build wealth.”