In Q4 of 2025, foreclosure auction supply increased year-over-year, including a more than three-year high in conversion of scheduled foreclosure properties into completed auctions.
Meanwhile, auction buyer activity weakened, led by a lower sales rate and fewer saves per property brought to auction, according to Auction.com.
Pricing signals were mixed, Auction.com said, with buyers paying slightly more relative to estimated value at foreclosure auction, but seller asking prices rose faster, contributing to a wider foreclosure bid-ask spread.
In contrast, Auction.com said that seller pricing at REO auction declined, contributing to a narrower REO bid-ask spread and a higher REO auction sales rate.
That sharp divergence between foreclosure auction pricing and REO auction pricing in Q4 provides a good natural experiment illustrating the impact of pricing on buyer demand, the website said.
Slight Increase in Willingness to Buy
Auction.com said that a survey of its 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.
The website said 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.
Foreclosure auction buyer activity slowed in Q4 2025, Auction.com noted. The foreclosure auction sales rate — a good measurement of buyers’ willingness to buy at the price provided — fell 7 percent quarter-over-quarter and 15 percent year-over-year to a 23-quarter low, Auction.com said. The sales rate declined steadily throughout the quarter and ended at a 68-month low in December.
According to Auction.com, the sales rate fell 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), Auction.com said.
Highest Sales Rate was in El Paso, Texas
The highest sales rates (buyers most willing to buy at the price provided) were in El Paso, Texas; Buffalo, New York; Toledo, Ohio; Boston, Massachusetts; and Richmond, Virginia. The lowest sales rates (least willing to buy) were in Minneapolis-St. Paul; Corpus Christi, Texas; Houma-Thibodaux, Louisiana; Flint, Michigan; and Pueblo, Colorado.
REO bidders per asset fell 14 percent quarter-over-quarter and was down 17 percent year-over-year to a 31-quarter low (lowest since Q1 2018), Auction.com said. Counter to the declining foreclosure sales rate trend, the REO auction sales rate rose 29 percent from both the previous quarter and a year ago to the highest level since Q1 2024. That could be due in part to more favorable pricing at REO auction.
“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.
There were early data showing that buyers were willing to pay more at auction, at least in some markets, Auction.com said.
That might be a sign of recovering confidence in the housing market, Auction.com noted. 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.
Foreclosure Price Demand was Down From a Year Ago
Auction.com said that REO auction buyers paid an average of 65.2 percent of estimated value in Q4, up from 65 percent in the previous quarter but down from 65.6 percent a year ago.
Foreclosure price demand fell from a year ago, Auction.com said, in exactly half of the 88 major markets analyzed (44), including Chicago, Dallas, Houston, St. Louis and Phoenix. Foreclosure price demand rose from a year ago in the other 44 markets, including New York, Atlanta, San Antonio, Philadelphia and Minneapolis-St. Paul.
Markets with the strongest foreclosure price demand were El Paso, Texas; Phoenix; Sacramento; New York; and Miami. Markets with the weakest price demand were Grand Rapids, Michigan; Minneapolis-St. Paul; the Quad Cities in Iowa; Pittsburgh; and Gulfport, Mississippi.
Auction.com said that scheduled foreclosure auctions went unchanged quarter-over-quarter but up 19 percent year-over-year and at 62 percent of the Q1 2020 level, which was the same share as last quarter.
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, Auction.com said. Meanwhile, 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 Rose
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 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), Auction.com said.
“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 include Texas, Louisiana, Colorado, Minnesota and Oklahoma.
Auction.com said that 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, Auction.com noted. 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 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 under the 2019 average level of 30.7 percent, Auction.com said. That shows more properties scheduled for auction are actually making it to auction. The BTA rate was level at around 26 percent to 27 percent for all three months in the quarter.
LTV for Properties Scheduled for Auction was Down
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 was 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, Auction.com said.
REO BTA volume was up 8 percent quarter-over-quarter and up 21 percent year-over-year to a 22-quarter high (highest since Q2 2020) and at 46 percent of the Q1 2020 level, Auction.com said.
Vacant REO BTA rose 24 percent year-over-year to a 22-quarter high (highest since Q2 2020). Vacant properties accounted for 54 percent of all REO BTA, matching the previous two quarters for the highest level since Q4 2021, according to Auction.com.
“I do prefer more of the vacant properties. They are more appealing as there is a quicker turnaround for selling without another party involved,” wrote survey respondent Natalie.
Pricing increased at foreclosure auction but decreased at REO auction, the website noted. 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.
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.
Willing to Pay Slightly More
Buyers were willing to pay slightly more at foreclosure auction in Q4 2025, and 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, Auction.com said.
The 200-point rise in foreclosure auction pricing corresponded to a 330-point decrease in sales rate at foreclosure auction.
“Just mostly on pause ’til rates and prices come back down,” said survey respondent William, an Auction.com buyer in Ohio.
The average credit bid-to-value at REO auction fell 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, Auction.com said. That 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 almost 200-point quarterly drop in REO auction pricing corresponded to a 400-point rise in sales rate at REO auction.
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