BAM Key Details:
- Realtor.com’s new foreclosure report shows the median foreclosed home sold for 27.2% below its estimated value in the first half of 2026, as foreclosure listings climbed to their highest share in 6 years.
- Foreclosure listings made up 1.3% of all homes for sale in April 2026, and REO properties drew 26.5% more page views than typical listings despite sitting on the market 11 days longer.
Foreclosure listings just hit their highest level in six years.
According to a Realtor.com report, foreclosed home listings are getting an average 26.5% more page views compared to non-foreclosed homes. Even with more eyes on these listings, buyers are able to secure deals, with the median foreclosed home selling at 27.2% below its estimated value.
Here’s what you need to know about what’s driving the rise in foreclosures and where they’re happening most.
Why Foreclosures Are Climbing
In April 2026, foreclosure listings made up 1.3% of all homes for sale, up from a recent low. It’s still shy of the 1.7% share recorded in April 2020, but it’s the closest we’ve come since.
Realtor.com senior economist Joel Berner explains why this trend signals a normalization and not a new foreclosure crisis:
“This rise is happening because pandemic-era forbearance and moratorium programs fully wound down in 2024, and 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.”
As he puts it, the cost pressure driving the increase in foreclosures reflects loan structures set years ago catching up with homeowners now.
This is what happens when homebuyers are not adequately prepared for the long-term costs of buying a home, particularly when it involves an adjustable-rate mortgage (ARM) or when manufactured confidence relies on the assumption that household income will rise to offset any increase in housing costs.
Before they know it, they’re facing foreclosure and wondering how they didn’t see it coming, or why their agent never talked to them about the risks.
The Discount & Why REOs Take Longer to Sell
When a home enters foreclosure and fails to sell at auction, it becomes “Real Estate Owned” (REO) property. From there, the lender often lists the property on an MLS, pricing it to sell quickly.
According to Realtor.com’s report, the median REO discount now sits at 27.2% below a home’s estimated value. Historically, that discount has ranged from 20% to 35% since 2018.
It rose to the high end during 2022 and 2023 with inflated automated valuations during the pandemic era. Price growth flattening in 2025 and 2026 has brought the discount back to a typical level.
Realtor.com’s data also shows foreclosure listings get 26.5% more page views than a typical listing. Yet they also sit on the market 11 days longer on average.
What slows them down?
- REO listings have 30.4% fewer photos
- REO listing descriptions run 33% shorter
- Most REO properties sell as is, meaning buyers absorb the cost of needed repairs
As to that last point, buyers can’t count on seller concessions with foreclosure listings, which means no mortgage rate buy-downs and no assistance with closing costs, either.
Buyers can still demand a home inspection. And conventional financing is still an option.
Also, since marketing materials for REO listings are limited, buyers may need more guidance from their agent to feel confident moving forward.
Where the Opportunity Is Concentrated
Markets with the highest shares of foreclosed properties offer the most opportunities for buyers to take advantage of REO discounts.
The top 10 metros by foreclosure share in June 2026:
- Lake Charles, LA (10.2%)
- Tuscaloosa, AL (7.7%)
- Dayton, OH (6.0%)
- Davenport, IA (5.7%)
- Montgomery, AL (5.7%)
- Redding, CA (5.4%)
- Pittsburgh, PA (5.3%)
- Erie, PA (5.2%)
- Baltimore, MD (5.2%)
- Mobile, AL (5.1%)
Nearly every metro on the list sits below the national median list price. Many buyers in these markets entered homeownership with less cushion to absorb increases in housing costs, on top of other rising household costs.
Three of the top 10 metros are in Alabama, where a statutory right of redemption allows a prior owner to reclaim a property after a foreclosure sale.
That redemption risk keeps auction bidders away. Meaning fewer auction bidders. Meaning more properties moving into REO status in Alabama markets specifically.
Still, Berner sees the rise in foreclosures as an opportunity for buyers:
“In a market where affordability is still the dominant challenge, foreclosures offer a path to a meaningful discount. 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.”
If you’re an agent in a market with a higher share of REO properties for sale, use this data, plus an in-depth knowledge of REO property purchases, to position yourself as the agent who knows where to find the REO homes that fit your clients’ needs and budgets, with the long-term in view.
Buyers in your market may be seeing “foreclosures at six-year high” in a headline and interpreting that as a sign it’s not a good time to buy.
Here’s how to help those buyers see the market, and their options, more clearly:
- Get the data for your local market on the years most of these homes were purchased
- Talk to lenders to learn what led owners in your market to foreclosure
- Tell your buyers what you learn and how to avoid the same pitfalls
From there, help your interested buyers set realistic expectations before touring an REO.
They should know, after every tour (or inspection) what they can expect to pay on top of the cost of buying that home, and the trade-offs that go with this option:
- What they’re gaining
- What they’re giving up
- The risks no one else is talking about
The goal is to leave them better off than before, whether that involves a home purchase this year or not. Real estate is a long game. Use this to build trust so more buyers in your market know who to call when they’re ready to make a move.
