Auction.com: Foreclosure Auction Volume Reaches Six-Year High
(Stock Photo courtesy of Jakub Zerdzicki via pexels)
The distressed property auction supply continues the steady rise that began in early 2025, Auction.com reported in its newest Auction Market Dispatch.
The report noted the trend is led in large part by mortgages insured by the Federal Housing Administration and recent vintage mortgages originated in 2022 or later — after the peak of the pandemic-triggered housing market “sugar high.”
Completed foreclosure auctions reached 66% of Q1 2020 levels, up 23% from a year ago and matching the six-year high in the previous quarter.
Scheduled foreclosure auctions in the second quarter reached 71% of Q1 2020 levels, up 13% from a year ago to a more than six-year high — indicating continued increases in completed foreclosure auction volume in the third quarter of this year. Both scheduled and completed foreclosure auction volume have now increased on an annual basis for six consecutive quarters.
“So far, the steady rise in foreclosure auction volume over the last year and a half looks more like a reversion to the mean rather than the beginning of a new broad-based housing crisis — despite some of the lofty percentage increases,” said Daren Blomquist, head of market economics at Auction.com.
But that said, Blomquist noted pockets of mortgages and geographies where the foreclosure auction numbers are more concerning, “namely mortgages originated in 2022 or later — particularly for the FHA-insured book — and in states like Texas, Arizona and Colorado where foreclosure auction volumes are now well above pre-pandemic levels.”
The report said bank-owned (REO) auction volume in the second quarter was down 3% from the previous quarter but up 11% from a year ago — the sixth consecutive quarter with an annual increase.
“Distressed property auction demand improved in Q2 2026, with demand gains visible across both foreclosure and REO channels,” Auction.com said. “Sales rates strengthened from the previous quarter for both auction types, while pricing alignment improved as seller pricing adjusted lower and bid-ask spreads narrowed.”
Distressed Demand
Buyer demand strengthened across both auction types in the second quarter, buoyed by lower seller pricing. The foreclosure auction sales rate rose 12% from the previous quarter and 3% from a year earlier. That placed the foreclosure auction sales rate at 114% of its Q1 2020 level.
The REO auction sales rate rose 11% the previous quarter and 43% from a year earlier to a four-year high. That placed the REO auction sales rate at 95% of its Q1 2020 benchmark.
Among 99 metropolitan areas with meaningful foreclosure auction volume, 55 posted higher foreclosure sales rates year-over-year, while 43 posted declines and one was unchanged (Allentown, Pa). Improving high-volume markets included Dallas-Fort Worth, Houston, Chicago, New York, Atlanta and Phoenix. Declining high-volume markets included Detroit, Minneapolis-St. Paul, St. Louis, Philadelphia and Washington, DC.
Price Demand
Despite lower seller pricing, buyer price demand held firm at foreclosure auction in Q2 2026. Foreclosure auction buyers were willing to pay an average of 66.5% of estimated retail market value, up from 66.2% in Q1 2026 and 66.0% in Q2 2025. That represented approximately 92% of the Q1 2020 foreclosure price-demand benchmark.
REO auction buyers were willing to pay an average of 65% of estimated retail market value, down slightly from 65.3% in Q1 2026 and 66.7% in Q2 2025. That represented nearly 98% of the Q1 2020 REO price-demand benchmark.
Distressed Supply
Distressed supply continued its steady rise in Q2 2026, the firm reported. Completed foreclosure auctions (also called properties brought to auction BTA), were at 66% of Q1 2020 levels, unchanged from Q1 2026 but up 23% from Q2 2025.
Scheduled foreclosure auctions were at 71% of Q1 2020 levels. Scheduled volume was up 4% quarter-over-quarter and 13% year-over-year. Both completed and scheduled foreclosure auctions have now increased on an annual basis for six consecutive quarters.
REO auction volume was at 48% of Q1 2020 levels, down 3% from Q1 2026 but up 11% from Q2 2025. “REO auction volume has also now increased on an annual basis for six consecutive quarters,” the report said. “The share of REO auctions for vacant properties plateaued near a six-year high of 54% in the second quarter.”
By loan type, completed foreclosure supply was led by loans insured by the FHA and U.S. Department of Veterans Affairs. VA-insured loans were at 106% of Q1 2020 levels, up 14% year-over-year. FHA-insured loans were at 95% of Q1 2020 levels, up 47% year-over-year. Loans backed by the government-sponsored enterprises Fannie Mae and Freddie Mac were at 68% of Q1 2020 levels, up 27% year-over-year.
