Key facts
- Completed foreclosure auctions in Q2 2026 reached 66% of Q1 2020 levels, a 23% year-over-year increase.
- Scheduled foreclosure auctions rose to 71% of Q1 2020 levels, up 13% year-over-year.
- Government-backed loans, particularly FHA and VA mortgages, showed the strongest foreclosure auction activity.
- Loans originated in 2022 or later represented the largest share of completed foreclosure auctions.
- Buyer demand strengthened, with foreclosure auction sales rates up 12% quarter-over-quarter.
- Texas, Arizona, Minnesota, Louisiana, and Colorado had foreclosure auction volumes above pre-pandemic levels.
Foreclosure auction activity saw a significant increase in the second quarter of 2026, reaching 66% of first-quarter 2020 levels, a six-year high and a 23% year-over-year rise. Scheduled auctions also climbed to 71% of pre-pandemic levels, indicating continued growth. This trend is largely attributed to a rise in distressed properties linked to Federal Housing Administration (FHA)-insured mortgages and loans originated after the COVID-19 housing boom. Government-backed loans, including those insured by the VA, demonstrated the strongest performance in foreclosure auctions compared to pre-pandemic levels.
Loans originated in 2022 or later constituted the largest portion of completed foreclosure auctions, more than doubling from the previous year. In contrast, loans from the 2005-2009 period represented a smaller, declining share. Bank-owned (REO) auction volume also saw an annual increase for the sixth consecutive quarter.
Buyer demand for distressed properties strengthened, with foreclosure auction sales rates increasing by 12% from the prior quarter and REO auction sales rates reaching a four-year high. This demand was partly fueled by lower seller pricing, leading to narrower bid-ask spreads. Buyers at foreclosure auctions paid an average of 66.5% of estimated retail market value.
Geographically, 31 states experienced year-over-year increases in completed foreclosure auction volume, with Texas, Florida, Georgia, Illinois, Ohio, California, and Michigan recording the highest volumes. Notably, Texas, Arizona, Minnesota, Louisiana, and Colorado had foreclosure auction volumes exceeding pre-pandemic levels.