AUSTIN – (By Dale King, Realty News Report) – Potential home buyers looking for a suitable residence at a down-to-earth price should take a close look at foreclosed-upon dwellings, advises Realtor.com.
The real estate listing service and website just released data saying typical foreclosed homes sold for 27.2% below their estimated total value during the first half of 2026. The information also notes that foreclosure listings are on the rise, having risen to their highest level in six years.
Overall, it said, foreclosure listings made up 1.3% of all homes on the market in April of 2026, up from a recent low and approaching the 1.7% high bank takeover mark recorded in April 2020.
The analysis also found that foreclosure listings are drawing more attention than the average listing, getting 26.5% more page views in the first half of 2026, even as they remained on the market an average of 11 days longer.
Realtor.com says the rate of foreclosures has ticked up in recent years after a period of suppression following the COVID-19 pandemic. The hike is no doubt a symptom of the affordability crisis impacting the housing market. Foreclosures are now about as common as they were in 2019, but well below the levels seen during the Great Financial Crisis about 10 years earlier, says Realtor.com.
Early 2026 Spike in Foreclosures
A recent report released in April by ATTOM, a provider of property data and real estate intelligence says the number of foreclosure filings and completions spiked a bit during the first quarter of 2026 but rose considerably more last year.
The ATTOM report showed that 118,727 U.S. properties underwent a foreclosure filing during the first quarter of 2026, a hike of 6% from the previous quarter and an increase of 26% from 2025. Bank repossessions also climbed 45% year over year.
“Foreclosure activity increased in the first quarter, with both starts and completed foreclosures posting solid year-over-year gains,” said Rob Barber, CEO at ATTOM. “While volumes remain below historical peaks, the continued rise, especially in starts and bank repossessions, suggests financial pressure may be building for some homeowners and could signal shifting housing market dynamics.”
The hike in foreclosure activity may signal the real estate market is continuing to normalize, ATTOM says. And the newly issued Realtor.com analysis seems to concur.
Normalization Is Not a Crisis
“Foreclosures are normalizing [this year], not accelerating into a crisis,” said Joel Berner, senior economist at Realtor.com. “This rise is happening because pandemic-era forbearance and moratorium programs fully wound down in 2024. The homeowners feeling it most are the ones who bought at peak prices and are now squeezed by rising insurance, taxes and adjustable-rate payments. Even with that pressure, we’re looking at a return to 2019 norms, not anything close to the Great Financial Crisis.”
Top 10 Metros by Foreclosure Shares
The following metros make up the top 10 areas by foreclosure share and are shown with the median list prices for all homes in that region:
- Lake Charles, La., 10.2%, $238,700
- Tuscaloosa, Ala., 7.7%, $339,900
- Dayton-Kettering-Beavercreek, Ohio, 6%, $260,000
- Davenport-Moline-Rock Island, 5.7%, $235,000
- Montgomery, Ala., 5.7%, $289,575
- Redding, Calif., 5.4%, $435,248
- Pittsburgh, 5.3%, $259,900
- Erie, Pa., $5.2%, $238,675
- Baltimore-Columbia-Towson, Md., 5.2%, $384,750
- Mobile, Ala., 5.1%, $274,999.
With one exception, homes in every metro on the list sit below the national median list price. Three Alabama markets appear in part because of a state-level legal parameter: Alabama’s statutory right of redemption allows a prior owner to reclaim their property after a foreclosure sale by reimbursing the buyer.
Top 10 Metros by the Numbers
The metro areas with the most foreclosure listings tend to be large ones with lots of listings in general. Two metropolitan areas in Texas are among the top 10. The list below shows the total number of foreclosed homes in the top 10 metros as of June 2026.
1 – Chicago-Naperville-Elgin, 611
2 — Philadelphia-Camden-Wilmington, 586
3 – Houston-Pasadena-The Woodlands, 579
4 – Baltimore-Columbia-Towson, Md., 360
5 – Phoenix-Mesa-Chandler, Ariz., 347
6 –Miami-Fort Lauderdale-West Palm Beach, 319
7 – Pittsburgh, 290
8 — Washington-Arlington-Alexandria, 285
9 – St. Louis, Mo./Ill., 218
10 — Austin-Round Rock-San Marcos, 214.
REOs Attract Attention
When a foreclosed home doesn’t sell at auction, it becomes a Real Estate Owned, or REO, property, often listed by the lender who prices it to sell quickly. Since 2018, the median REO discount has ranged from roughly 20% to 35%.
The high end of that range was reached in 2022 and 2023 when the frenzy of pandemic-era buying inflated automated home valuations (AHVs) and made the discount look larger than it was. As price growth flattened in 2025 and 2026, the discount settled back to a more typical 27.2%.
REO listings attract considerable attention, but still generally take longer to sell. The slower pace reflects the product. Realtor.com says REO listings had 30.4% fewer photos and descriptions and were 33% shorter than those of standard listings.
Most sell as-is, meaning buyers cover the cost of any needed repairs. Buyers can inspect the interior and use conventional financing, but the condition and limited marketing materials mean many potential buyers take longer to commit — or they decide to walk away because of the higher level of uncertainty.
Foreclosures Offer ‘Real Savings’
Though foreclosure is certainly a painful process for the residents of the home in question, leading to their displacement and long-term credit detriment, it presents an opportunity for savvy buyers and investors who are looking to buy homes for well below their market value.
“In a market where affordability is still the dominant challenge, foreclosures offer a path to a meaningful discount,” said Berner. “The process takes patience, but for buyers who are prepared and can navigate the challenges of buying this type of home, the savings are real.”
Houston homebuyers may be seeking relief from rising prices. The average single-family home price rose 1.2% over the year to a record $455,159 in June, according to the Houston Association of Realtors monthly home sales report. That surpassed the previous peak of $449,556 set in June 2025.
July 11, 2026, Realty News Report Copyright 2026
Feature image by CALpix,
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