Foreclosed homes sold at a median 27.2% discount to their estimated market value during the first half of 2026, offering buyers lower-priced options as foreclosure listings climbed to their highest share of the housing market in six years, according to a new Realtor.com report.
Foreclosure listings accounted for 1.3% of all homes for sale in April, up from recent lows and approaching the 1.7% share recorded in April 2020, the company announced. While still below levels seen during the housing crash more than a decade ago, the increase reflects a continued normalization following the expiration of pandemic-era foreclosure protections.
“Foreclosures are normalizing, not accelerating into a crisis,” Realtor.com Senior Economist Joel Berner said. “This rise is happening because pandemic-era forbearance and moratorium programs fully wound down in 2024, and the homeowners feeling it most are the ones who bought at peak prices and are now squeezed by rising insurance, taxes, and adjustable-rate payments.”
Berner added that current foreclosure activity is “a return to 2019 norms, not anything close to the Great Financial Crisis.”
The report found that lender-owned, or Real Estate Owned (REO), properties attracted 26.5% more online views than a typical listing during the first half of 2026. Even so, they remained on the market an average of 11 days longer than other homes.
According to Realtor.com, REO properties generally include fewer marketing materials, with 30.4% fewer listing photos and property descriptions averaging 33% shorter than those for traditional listings. Because most are sold as-is, buyers often take additional time to evaluate repair costs and financing options.
The median REO discount has ranged between roughly 20% and 35% since 2018. Realtor.com said larger discounts recorded during 2022 and 2023 reflected rapidly rising home values during the pandemic, while the 27.2% median discount reported in 2026 aligns more closely with historical norms.
The report also found that most metropolitan areas with elevated foreclosure activity remain below the national median home list price. Three Alabama markets were highlighted because the state’s statutory right of redemption, which allows former owners to reclaim foreclosed properties under certain conditions, can discourage auction bidding and increase the number of lender-owned homes entering the market.
“For buyers who are prepared and can navigate the challenges of buying this type of home, the savings are real,” Berner said.
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