Completed foreclosure auctions during the first quarter of 2026 rose about 10% from the previous quarter and were up 33% from the prior year, according to an Auction.com report released Thursday.
That brings completed property auctions to within 66% of their first-quarter 2020 levels, when COVID-era federal protections from the CARES Act brought the foreclosure market to a screeching halt.
As Daren Blomquist, vice president of market economics at Auction.com, pointed out in an analysis published by Scotsman Guide in January, pandemic-era measures that took effect in March 2020 helped hundreds of thousands of homeowners avoid foreclosure.
But those federal programs also drained home equity, and many distressed homeowners “are now falling back into default and facing foreclosure with little or no equity left” — particularly among borrowers with loans insured by the Federal Housing Administration, according to Blomquist.
However, this week’s analysis by the U.S.’s largest online auction marketplace views the first-quarter foreclosure spike as a “continued normalization rather than a new crisis in the distressed property market.”
The report also flagged a divergence between foreclosure auctions and real estate owned (REO) auctions, which involve properties owned by a lender following an unsuccessful foreclosure auction.
“Demand improved more noticeably at REO auction than at foreclosure auction, likely because of more market-attuned pricing,” the report noted.
By the numbers, Auction.com reported the REO auction sales rate climbed 12% during the quarter and 36% year over year, while the foreclosure auction sales rate increased just 2% quarterly and fell 12% annually.
The foreclosure auction sales rate refers to the number of properties buyers were willing to purchase as a percentage of properties available for sale. The completion rate measures the percentage of properties scheduled for auction that finalized the foreclosure process, either by being sold to a third party or reverting to the lender as an REO property.
Looking ahead, scheduled foreclosure auctions saw an 11% quarter-over-quarter increase during the first three months of the year, “indicating additional supply is likely to flow through the auction pipeline in coming quarters.”
As a Cleveland-based buyer stated in Auction.com’s recent sentiment survey: “Expecting more inventory in the second quarter of 2026. This is impacting how I am currently investing as more inventory will most likely lower overall prices.”
