Previous In this conversation from Dallas, Texas, Allison LaForgia sat down with Daren Blomquist, VP of Market Economics at Auction.com, to unpack the latest foreclosure auction trends and what they mean for housing supply, affordability and market balance.
Blomquist expressed the biggest surprise in the data is the recent rise in foreclosure volume. “The last couple of years, really, the last five years, foreclosure volume has been pretty low, and in the pandemic, it was almost nothing,” he said. “In fact, in 24 and early 25, we were seeing an unexpectedly low level of foreclosure volume. But what we saw at the end of 25 and into this year now are some pretty substantial percentage-wise increases in foreclosure auction volume.”
He pointed to a “48% year over year increase in foreclosure auction volume” in the fourth quarter of 2025. Still, he emphasized perspective while looking at the current data. “We’re at about 40% below pre-pandemic levels,” he said. “It’s still not crisis levels, but I think what may serve mortgage servicers may be missing there is that there’s been a shift in the market.”
That shift resembles changes seen in the retail market. “It’s become more of a buyer’s market at foreclosure auction and less of a seller’s market,” Blomquist said, warning servicers they “could see their loss severity rates go up on these defaulted loans, if they’re not paying attention to this trend and really pricing their properties a little bit different.”
Blomquist also challenged common misconceptions about who buys at auction. “There’s a perception out there… that the folks buying at foreclosure auction are part of the problem when it comes to housing supply and housing affordability,” he said. “I would argue that they’re actually part of the solution instead of the problem.”
Contrary to assumptions, “about 15 to 20% of our buyers are owner occupants,” he said, calling it “somewhat surprising… when you’re talking about an all cash auction, no interior inspection, distress, pretty highly distressed properties.”
He also refuted the idea that large institutional investors dominate auctions. “99% of our buyers bought fewer than 10 properties in 2025,” he said. “And 80% bought one or two properties.” The median distance between where buyers live and where they purchase is “17 miles,” adding, “We call them local community developers.”
Those buyers, he said, are measurably supporting homeownership. “55% of our buyers say their main strategy is to renovate the property and resell it specifically to owner-occupants,” he said. And the data backs that up: “Over 60% of the properties resell… and of those resales, 79% are going to owner occupants.”
Affordability remains intact, he added. “The average sale price over the last 10 years of a renovated foreclosure… is around $237,000. That’s about 32% below the average sale price of all properties over that same time frame.” In underserved neighborhoods, “the average price is around $202,000,” and in opportunity zones, “$185,000.”
Blomquist described foreclosure as a necessary component of the housing ecosystem. “Foreclosures in the scope of the housing ecosystem, they’re the wolves of the housing ecosystem,” he said, referencing Yellowstone’s ecological balance. “A certain level of foreclosures is necessary in a market that relies so heavily on real estate financing. You have to have that outlet to take distressed properties and recycle them back into the market.”
When foreclosure volume rises modestly, “I’m not alarmed by it,” he said. “I actually think it’s bringing balance and health to the housing market.”
Looking ahead, he said industry leaders should watch “mortgage rates and housing supply.” If rates flatten or decline, “that will bring more demand at the foreclosure auctions.” But in markets where supply is rising, “our buyers are pulling back a little bit because they don’t have the capacity.”The biggest opportunity, he said, may come before foreclosure. “Distressed homeowners… many times they still have equity in their homes,” he said. “There’s an opportunity for them to sell that home, avoid foreclosure, and walk away with equity.” Pre-foreclosure solutions, he added, “will help lower foreclosure volume… and take care of that distress earlier in the process.”
