A new report from Realtor.com® is tracking the recent path of foreclosures, shedding light on what happens when these homes become Real Estate Owned (REO). These properties are then listed by banks on various online platforms and multiple listing services, often creating a new path to homeownership for some buyers.
Additionally, the research indicates that the rate of foreclosures has increased in recent years. This follows a period of suppression after the COVID-19 pandemic, where various measures kept foreclosure rates artificially low.
Moreover, foreclosures are now about as common as they were in 2019. However, these levels are still well below the numbers seen during the Great Financial Crisis. The report identified specific markets with the most foreclosure listings as of June 2026, and Washington, DC, is among the areas that has seen a significant uptick.
Foreclosure listings see an uptick in the capital
In the Washington-Arlington-Alexandria, DC-VA-MD-WV, metro area, the foreclosure share of listings was 1.90% as of June 2026. This figure reflects an increase in bank-owned properties becoming available on the market.
However, the overall housing market in Washington, DC, remains robust. The median listing price for all homes in the area is currently $585,000.
As a result, the potential for savings on a foreclosed property can be significant for buyers. In April 2026, the median foreclosed home was sold for a discount of 27.2% from its Realtor.com automated valuation models (AVM).
Understanding the national foreclosure trend
The recent rise of foreclosures reflects a return to pre-pandemic norms after defaults plummeted due to federal provisions during the COVID-19 pandemic. As of the start of 2026, the national foreclosure start rate stood at 0.24%, roughly matching the 2019 benchmark, according to Mortgage Bankers Association data reported by Moody’s.
Furthermore, the current increase is a symptom of the ongoing housing affordability crisis. “Buyers since 2023, when home prices flattened off, are most at risk,” said Joel Berner, senior economist, Realtor.com. He iterated, “They’re newer to their mortgage and don’t have as much of an equity stake in their home, partly because the first few years of mortgage payments are made up of significantly more interest than principal and partly because their home has not appreciated as much as those that were purchased before the price surge of 2021 and 2022.”
In addition, some markets that were once seen as affordable havens are now seeing more foreclosures. “The affordability advantages of these metros that made homeownership possible for buyers on the margin lead to a selection bias that leaves the typical homeowner more susceptible to foreclosure,” Berner explained.
However, for buyers and investors willing to take on a project, these properties can present a unique opportunity, though they come with risks. “The biggest risk is that many of these homes have been vacant or neglected,” said Danette McManus, a local real estate agent in Lake Charles, LA, which currently leads the nation with foreclosures. “In our climate, that can mean moisture issues, mold, deferred maintenance, storm-related repairs, or other problems that aren’t immediately visible.”
Generated with AI assistance and finalized through human editorial oversight by Dina Sartore-Bodo and Gabriella Iannetta.
