Irvine, Calif. — Jan. 29, 2026 — Auction.com, the nation’s leading distressed real estate marketplace, today released its Q4 2025 Auction Market Dispatch, which shows that foreclosure auction volume in the fourth quarter of 2025 increased 48 percent from a year ago to the highest level since Q2 2020 — although still 39 percent below the Q1 2020 level

Volume increased across all loan types (FHA, GSE, Private, VA, USDA) and in 43 states, including Texas (up 92 percent), Florida (up 176 percent), Ohio (up 4 percent), Illinois (up 41 percent), and Georgia (up 140 percent).

A survey of Auction.com buyers in early January 2026 shows a slight increase in willingness to buy compared to the previous quarter: 23 percent of those surveyed said market conditions were making them more willing to buy at auction, up from 19 percent in the previous quarter. That 23 percent was slightly below the 24 percent who said market conditions were making them more willing to buy in the first quarter of 2025.

“If rates continue lower, I’ll buy more,” wrote survey respondent Michael, an Auction.com buyer in Texas.

A sharp divergence between foreclosure auction pricing and REO auction pricing in the fourth quarter of 2025 provides a good natural experiment illustrating the impact of pricing on demand from the local community developers buying at auction (see more in the Distressed Pricing section below).

Distressed Demand

Foreclosure auction buyer activity slowed in Q4 2025. The foreclosure auction sales rate — a good measurement of buyers’ willingness to buy at the price provided — declined 7 percent quarter-over-quarter and 15 percent year-over-year to a 23-quarter low. The sales rate declined steadily throughout the quarter, ending at a 68-month low in December.

The sales rate decreased from a year ago in 69 percent of 88 major markets analyzed, including Chicago (down 16 percent), Dallas-Fort Worth (down 27 percent), Houston (down 33 percent), Atlanta (down 20 percent) and St. Louis (down 19 percent).

“Waiting to see how current events and policies of the U.S. government are going to shape this year,” wrote survey respondent David, an Auction.com buyer in California, where the sales rate decreased in five of six metros analyzed.

Markets with annual increases included New York (up 2 percent), Phoenix (up 18 percent), Minneapolis-St. Paul (up 2 percent), Miami (up 19 percent) and Pittsburgh (up 40 percent).

Counter to the declining foreclosure sales rate trend, the REO auction sales rate increased 29 percent from both the previous quarter and a year ago to the highest level since Q1 2024. This could be in part due to more favorable pricing at REO auction (see pricing section).

“My pool of workers are influencing how quickly I can put a property on the market.  It’s getting harder and harder to find good help,” wrote survey respondent Elaine, an Auction.com buyer in Missouri.

Price Demand

There wereearly data indicating buyers were willing to pay more at auction, at least in some markets. This could be a sign of recovering confidence in the housing market. Foreclosure auction buyers paid an average of 67.4 percent of estimated value in Q4 2025, up from 66.2 percent in the previous quarter and 66.6 percent a year ago. Foreclosure price demand decreased throughout the quarter after hitting a 19-month high in October.

REO auction buyers paid an average of 65.2 percent of estimated value in Q4 2025, up from 65.0 percent in the previous quarter but down from 65.6 percent a year ago.

Distressed Supply

Foreclosure properties brought to auction (BTA) were up 7 percent quarter-over-quarter and up 48 percent year-over-year to a 23-quarter high, reaching 61 percent of the Q1 2020 level. Q4 2025 marked the fourth consecutive quarter with an annual increase in foreclosure BTA, and the 48 percent increase was the biggest since Q3 2022.

Foreclosure BTA volume hit a 69-month high (highest since March 2020) in October, then decreased seasonally in November and December, although November’s and December’s numbers were still up year-over-year.

Foreclosure BTA volume in Q4 2025 increased from a year ago in 43 states, including Texas (up 92 percent), Florida (up 176 percent), Ohio (up 4 percent), Illinois (up 41 percent) and Georgia (up 140 percent).

“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,” wrote survey respondent Patrick, an Auction.com buyer in Ohio.

Despite the widespread annual increases in Q4 2025, only 13 states posted foreclosure auction volume that was above the pre-pandemic level of Q1 2020. Those states includes Texas, Louisiana, Colorado, Minnesota and Oklahoma.

Foreclosure BTA volume was up year-over-year for all loan types, led by VA-insured loans (up 428 percent). A 2024 foreclosure moratorium on most VA-insured loans contributed to the large increase in that category. Other annual increases included FHA-insured (up 56 percent), GSE (up 33 percent), privately held (up 12 percent) and USDA-insured loans (up 10 percent).

The roll rate from scheduled foreclosure auction to foreclosure BTA (BTA rate) was up 7 percent quarter-over-quarter and up 24 percent year-over-year to a 14-quarter high of 26.6 percent, but still below the 2019 average level of 30.7 percent. This shows more properties scheduled for auction are actually making it to auction. The BTA rate was relatively level at around 26 percent to 27 percent for all three months in the quarter.

The average loan-to-value (LTV) ratio for properties scheduled for foreclosure auction was down 1 percent from a nine-quarter high in the previous quarter but still up 5 percent year-over-year. A higher LTV means less equity in properties scheduled for auction, and less equity is likely helping to boost the BTA rate.

Distressed Pricing

Pricing increased at foreclosure auction but decreased at REO auction. Those divergent trends contributed to contrasting trends in the bid-ask spread and the sales rate illustrating the impact of auction pricing on buyer demand,

Foreclosure auction pricing: The average credit bid-to-value increased by 200 basis points from the previous quarter and was up 351 basis points from a year ago. Although buyers were willing to pay slightly more at foreclosure auction in Q4 2025, the jump in seller asking prices was much sharper, contributing to a wider foreclosure bid-ask spread of 772 basis points, up from 735 basis points in the previous quarter but down from 839 basis points a year ago.

The 200-point rise in foreclosure auction pricing also corresponded to a 330-point decrease in sales rate at foreclosure auction.

“Just mostly on pause till rates and prices come back down,” said survey respondent William, an Auction.com buyer in Ohio.

REO auction pricing: The average credit bid-to-value at REO auction decreased by 197 basis points from the previous quarter and was down 495 basis points from a year ago to the lowest pricing since Q3 2020. This helped narrow the bid-ask spread at REO auction to 1,009 basis points in Q4 2025, down from 1,222 basis points in the previous quarter and down from 1,461 basis points a year ago.

The nearly 200-point quarterly drop in REO auction pricing also corresponded to a 400-point rise in sales rate at REO auction.

Auction.com is the nation’s leading online marketplace for the disposition of distressed residential properties. The company goes beyond traditional disposition programs, offering tools and services that stabilize neighborhoods, expand homeownership, maximize sales, shorten the sales cycle, yield higher returns, mitigate risks and elevate results. Our seller strategy includes customized and flexible programs, data intelligence and buyer insights, and pioneering technology. This includes Remote Bid®, which expands the buyer base nationwide by letting buyers bid on and win select foreclosure sales from anywhere, and Portfolio Interact™, featuring Bid Interact™. The national footprint for online and in-person auctions includes all 50 states, as well as Washington, DC, and Puerto Rico. Auction.com is headquartered in Irvine, CA, with offices in key markets nationwide.