Foreclosures hit highest level since 2019, sparking interest from bargain hunters
Claire Boston· Senior Reporter
Sat, July 18, 2026 at 9:56 PM GMT+5:30
4 min read
After years at near record-low levels, foreclosures are on the rise again. For some homebuyers, that can mean a rare opportunity to enter the market at lower prices.
The median foreclosed home sells for about 27% below typical market value, a discount that reflects lenders’ desire for quick sales of properties they have taken over. Most foreclosed homes are sold “as-is,” leaving buyers on the hook for repairs
At a time when home prices are hovering near all-time highs, such deals can look appealing, experts told Yahoo Finance, especially to buyers with experience navigating the complexities of the homebuying process and a willingness to do renovations.
“There are a lot of risks and a lot of complications with buying these things, so it’s not for everybody,” Realtor.com senior economist Joel Berner said. “But it’s becoming more of an option — it’s a larger share of the market.”
In the first half of 2026, some 228,000 homes in the US had a foreclosure filing, like a default notice, scheduled auction, or bank repossession, up 21% from last year and the highest level since 2019. Homes owned and listed for sale by a lender made up 1.3% of all listings in April the highest level for that month since 2020.
Long-term normalization
The latest uptick has brought foreclosure rates roughly in line with pre-pandemic levels. Some borrowers found themselves in trouble after Covid-era mortgage relief programs ended in 2024. Others have been stressed by the rising costs of homeownership. However, foreclosure rates are still far below levels reached during the 2008 subprime mortgage crisis — and it can take a long time, sometimes even years, before a home that enters foreclosure proceedings is actually sold.
Foreclosure sales are most common in relatively low-cost areas, where buyers frequently have lower incomes and less cushion if they run into financial trouble.
Bank-owned properties make up the highest share of listings in Lake Charles, La., at 10.2%. They’re also elevated in communities including Dayton, Ohio; Davenport, Iowa; Redding, Calif.; and parts of western Pennsylvania They’re also common in parts of Alabama, due in part to state laws that give former owners the right to repurchase a property, discouraging investors from participating in foreclosure auctions.
Many foreclosed homes for sale draw strong initial interest due to their lower prices, but wind up lingering on the market because buyers are unfamiliar with buying from a bank or wary of the major repairs many of the homes need because the previous owners were unable to afford maintenance.
