Foreclosure Auction Volume Spikes YoY

According to a new report by Auction.com, foreclosure auction volume continued its upward trend in the third quarter.

The report noted that completed auctions rose 25% year over year, making Q3 2026 the seventh consecutive quarter of annual volume gains and the highest quarterly total since Q1 2020.

Scheduled foreclosure auctions rose 15% from a year earlier, Auction.com said, reaching 71% of the Q1 2020 level. That’s a new post-pandemic high, the company said.

Loans insured by the Federal Housing Administration (FHA) accounted for most of the increase, Auction.com noted.

It said that FHA foreclosure auction volume surged 73% year over year and, for the first time in this cycle, crossed its own pre-pandemic baseline, reaching 117% of Q1 2020 levels — the highest since Q1 2019.

FHA-insured mortgages accounted for 43% of all foreclosure auction volume, the highest share since Q1 2015.  

Mortgages originated in 2022 or later represented 46% of all foreclosure auction activity in Q3 2026, as an early wave of higher-rate post-pandemic originations continues moving through the default pipeline.

Foreclosure auction volume for those recent-vintage loans rose 73% from a year ago.

Auction volume for real estate owned (REO) properties in Q3 2026 increased 18% from a year ago — the seventh consecutive quarter with an annual increase — reaching the highest level since Q3 2020 and 51% of the pre-pandemic level in Q1 2020, Auction.com noted.  

Daren Blomquist, Head of Market Economics at Auction.com, wrote that scheduled foreclosure auction volume for the fourth quarter indicates that both foreclosure auction volume and REO auction volume will continue to increase in that quarter.

Compared to the same time last year, scheduled foreclosure auction volume is up 11% for October, up 31% for November, and up 15% for December.  

Distressed Demand

Foreclosure Auction Sales Rate

The foreclosure auction sales rate eased to 45.5% in Q3 2026, down 5% from Q2 2026 but essentially flat year over year (+0.4 percent) and still 8% above the Q1 2020 pre-pandemic benchmark — the seventh consecutive quarter the sales rate has exceeded that level.  

Conversely, Blomquist noted, demand jumped for FHA-insured foreclosure auction volume compared to a year ago as pricing adjusted lower for those assets.

He said that the FHA sales rate rose 19% from a year ago as pricing for those properties decreased 3% from a year ago.  

REO Auction Sales Rate

Blomquist said that REO auction demand also improved substantially on a year-over-year basis as pricing adjusted lower. The sales rate for all REO auctions rose 29% from Q3 2025 as pricing adjusted 3% lower over the same period.  

Foreclosure Auction Demand by Metro

Auction.com said that of 64 major markets tracked, exactly half (32) posted year-over-year sales rate gains and 32 declined. Demand held up best in Sun Belt and Midwest markets with healthy job growth, while the Great Lakes industrial corridor and several high-cost coastal markets showed continued softness, Auction.com noted.

It said that markets with the biggest year-over-year increase in sales rate were Ocala, Florida (up 553%), North Port-Sarasota-Bradenton, Florida (up 192%), Lafayette, Louisiana (up 125%), Lakeland, Florida (up 86%), and Colorado Springs, Colorado (up 45%).

Among markets with the most foreclosure auction volume in Q3 2026, those with an increasing sales rate included Houston, Texas (up 15%), Dallas, Texas (up 5%), Atlanta, Georgia (up 18%), Chicago, Illinois (up 3%), and Phoenix, Arizona (up 16%).  

Among markets with the most foreclosure volume in Q3 2026, those with a decreasing sales rate compared to a year ago included New York, New York (down 10%), Detroit, Michigan (down 27%), St. Louis, Missouri (down 47%), Tampa, Florida (down 6%), and Riverside-San Bernardino, California (down 34%).

Buyer Price Demand

Auction.com noted that foreclosure auction buyers paid an average of 65.3% of estimated retail market value in Q3 2026, down from 66.8% in Q2 2026 but up from 64.5% in Q3 2025. It said buyer pricing remains within its recent range — roughly 92% of Q1 2020 benchmark levels — with the modest quarter-over-quarter pullback consistent with seasonal demand softening.

Among the 64 major markets tracked in Q3 2026, 27 posted an annual increase in foreclosure auction price demand, led by Charlotte, North Carolina (up 36%), North Port-Sarasota-Bradenton, Florida (up 26%), Wichita, Kansas (up 21%), Akron, Ohio (up 16%), and Pensacola, Florida (up 14%).

The other 37 markets posted an annual decrease in foreclosure auction price demand in Q3 2026, led by Cape Coral-Fort Myers, Florida (down 17%), Toledo, Ohio (down 16%), Columbus, Ohio (down 15%), Shreveport, Louisiana (down 15%), and Little Rock, Arkansas (down 15%).

Auction.com said that REO buyers paid an average of 62.2% of estimated retail market value, down from 65.2% in Q2 and 64% in Q3 2025, as growing REO inventory and lower auction pricing gave buyers the opportunity to land better deals.  

Distressed Supply

Overall Volume

Completed foreclosure auctions in Q3 2026 were up 6% from Q2 and up 25% from Q3 2025.

The company said that the scheduled pipeline of foreclosure auctions was essentially flat from Q2 but up 15% from a year ago, suggesting the completed volume tailwind has room to continue. Together, Auction.com said that completed and scheduled foreclosure auction volume has now recorded annual gains for seven consecutive quarters.

REO auction volume in Q3 2026 increased 7% from Q2 and 18% from Q3 2025, marking seven consecutive annual increases. The share of vacant REO properties held nearly constant at 54%, in line with Q2 2026 (53.9%) and Q3 2025 (54.1%).

By Loan Type

Auction.com said that FHA-insured mortgages drove the Q3 surge, rising 73% year over year to the highest level since Q1 2019, 17% above the pre-pandemic benchmark in Q1 2020. Foreclosure auction volume from the Government Sponsored Enterprises Fannie Mae and Freddie Mac grew at a more measured 30% on a year-over-year basis.

By Loan Vintage

Mortgages originated in 2022 or later accounted for 46% of all completed foreclosure auctions in Q3 2026, growing 73% year over year, Auction.com noted. This cohort — the first generation of borrowers who locked in at materially higher rates than their 2020 to 2021 counterparts — is arriving in the foreclosure auction market in increasing numbers, the company said.

According to Auction.com, older vintages continued to contract. Great Recession-era loans (2005 to 2009) fell 22% year over year to less than 9% of volume. Pre-2015 originations collectively represent only 19% of activity.

By State

Thirty-one states recorded year-over-year increases in completed foreclosure auction volume in Q3 2026, including Texas (up 54%), Florida (up 67%), California (up 80%), Ohio (up 12%), and Illinois (up 7%).

Auction.com said that states with the largest year-over-year percentage increase in foreclosure auction volume were Arkansas (up 113%), California (up 80%), South Carolina (up 76%), Nevada (up 76%), and Washington (up 69%).

Eighteen states reached or exceeded their Q1 2020 pre-pandemic baseline in the third quarter of 2026, including Texas (38% above Q1 2020 baseline), California (9% above), Arizona (31% above), Louisiana (41% above), and Colorado (246% above).

Following Colorado, states with Q3 2026 foreclosure auction volume furthest above their Q1 2020 pre-pandemic benchmark were Connecticut (181% above), Utah (48% above), Wyoming (47%above), and Alaska (44% above).

States with the most foreclosure auction volume in Q3 2026 were Texas (15% of national total), Florida (8%), California (6%), Ohio (5%), and Illinois (5%).

Distressed Pricing

Foreclosure Auction Pricing

Foreclosure auction seller pricing — the minimum amount sellers are willing or able to take (credit bid) as a percentage of estimated market value — came in at 64.2% in Q3 2026, down from 65.1% in Q2 and essentially flat year over year (-0.3%).

Blomquist said the relatively flat pricing overall masks divergent trends by loan type and vintage.

By loan type, the lowest foreclosure auction pricing in the third quarter of 2026 was for loans insured by the U.S. Department of Agriculture (USDA) at a 55.9% credit bid-to-value ratio, followed by GSE-backed loans (62.1%) and FHA-insured loans (62.6%). The FHA pricing was down from 64.6% a year ago. Loans insured by the Department of Veterans Affairs had the highest pricing among loan types, with a 76.3% credit bid-to-value ratio followed by privately held loans at 66.8%.

The lowest-priced vintage cohort was for loans originated between 2010 and 2014, with a 48% credit bid-to-value ratio on average, followed by pre-2000 (50.2%) and 2000 to 2004 (57.1%). The highest-priced vintage cohort was for loans originated in 2022 or after with a 70.5% credit bid-to-value ratio on average, followed by loans originated between 2020 and 2021 (64.4%), and loans originated between 2005 and 2009 (64.3%).

Auction.com said that year over year, credit bid-to-value ratios (seller pricing) fell in 25 of 64 metros, led by Ocala, Florida (down 22%), North Port-Sarasota-Bradenton, Florida (down 17%), New Orleans, Louisiana (down%), Memphis, Tennessee (down 15%), and Lakeland, Florida (down 14%).

Seller pricing (credit bid-to-value ratio) increased from a year ago in the remaining 39 markets analyzed, led by Raleigh, North Carolina (up 47%), Pensacola, Florida (up 25%), Canton, Ohio (up 14%), Dayton, Ohio (up 13%), and Akron, Ohio (up 11%).  

REO Auction Pricing

Auction.com noted that REO reserve pricing fell to 74.9% of estimated market value, down from 75.6% in Q2 2026 and down from 77.1% in Q3 2025. It said the lower pricing for REO auctions compared to a year ago corresponded with a rise in sales from a year ago.