Completed foreclosure auctions in the United States rose 25% year over year in the third quarter of 2026, reaching the highest quarterly total since the first quarter of 2020, according to Auction.com’s Q3 2026 Auction Market Dispatch. It is the seventh consecutive quarter of annual volume gains — a steady climb that has now carried auction activity to a post-pandemic peak.
The headline number hides the real story: this surge is not spread evenly. It is being driven by two specific groups — government-backed FHA loans and mortgages signed in 2022 or later, when prices and interest rates were at their highest.
FHA loans account for most of the increase
Loans insured by the Federal Housing Administration accounted for most of the increase in the third quarter. FHA foreclosure auction volume rose 73% year over year and crossed its pre-pandemic baseline for the first time in this cycle, reaching 117% of first-quarter 2020 levels — the highest since the first quarter of 2019.
FHA-insured mortgages accounted for 43% of all foreclosure auction volume, the highest share since the first quarter of 2015. FHA loans are designed for buyers with smaller down payments, which makes them more sensitive when household budgets tighten.
The 2022-era mortgage wave
Mortgages originated in 2022 or later represented 46% of all foreclosure auction activity in the third quarter. Volume for these recent-vintage loans increased 73% from a year ago, as an early wave of higher-rate, post-pandemic originations moves through the default pipeline.
In plain terms: families who bought at the most expensive moment in modern memory, with the highest borrowing costs, are now the ones most likely to appear in auction data.
Bank-owned homes are rising too
Real estate-owned (REO) auction volume — homes already taken back by banks and then auctioned — rose 18% from a year ago, its seventh consecutive quarterly increase, reaching the highest level since the third quarter of 2020 and 51% of the pre-pandemic level.
Scheduled foreclosure auction volume for the fourth quarter points to more increases ahead: compared with the same time last year, scheduled volume is up 11% for October, up 31% for November and up 15% for December.
Where the increases are biggest
Thirty-one states posted annual increases in completed foreclosure auctions. Among large states, California rose 80%, Florida 67%, Texas 54%, Ohio 12% and Illinois 7%. The biggest percentage gains came in Arkansas at 113%, followed by California, South Carolina and Nevada at 76% each, and Washington at 69%.
Despite the increases, buyers are still showing up: the share of auctioned homes that actually sold eased only slightly to 45.5%, flat from a year ago and 8% above the pre-pandemic benchmark. Discounts, in other words, are not automatic.
Is this another 2008?
Not on these numbers. Total auction volume is still below its pre-pandemic peak in absolute terms, and the pattern so far looks more like a gradual return toward normal after years of foreclosure moratoriums and forbearance programs than a system-wide crisis. The risk is concentrated — in FHA loans, in 2022-era mortgages, and in a handful of states — rather than spread across the whole housing market.
That distinction matters for anyone watching the market: the headline 25% jump is real, but it describes a specific, still-contained pocket of distress, not a repeat of the last housing crash.
FAQ
How much did foreclosure auctions rise in Q3 2026?
Completed foreclosure auctions rose 25% year over year, the highest quarterly total since Q1 2020.
What is driving the increase?
FHA-insured loans (up 73%) and mortgages originated in 2022 or later, which make up 46% of all foreclosure auction activity.
Which states saw the biggest increases?
Arkansas (113%), California (80%), South Carolina and Nevada (76% each), and Washington (69%).
Will auctions keep rising?
Scheduled volume for Q4 2026 is up 11% for October, 31% for November and 15% for December versus a year ago, pointing to further increases.
Sources
- https://www.housingwire.com/articles/foreclosure-auctions-up-25-in-the-past-year-hit-a-post-pandemic-peak/
- https://themortgagepoint.com/2026/10/22/foreclosure-auction-volume-rises-to-new-post-pandemic-high-in-q3/
- https://www.forumnadlanusa.com/foreclosure-auctions-rise-25-percent-q3-2026-fha-73-percent/