U.S. Home Prices Fall 2% as Foreclosures Rise — Where Buyers Could Find Deals in 2026

Despite declining home prices, 98% of counties analyzed remain less affordable than historical norms. Rising foreclosure activity could create opportunities for homebuyers and investors.

The U.S. housing market is showing signs of change. Home prices are declining, foreclosure activity is increasing, and buyers are gaining negotiating power in many markets. Yet homeownership remains unaffordable for millions of Americans.

According to ATTOM’s third-quarter 2026 affordability report, 98% of the 583 counties analyzed were less affordable than their historical averages, despite the national median home sales price falling approximately 2% year over year to $368,000. For buyers searching for foreclosures, bank-owned properties, and homes priced below market value, these conditions could present new opportunities.

Home Prices Are Falling, but Affordability Remains a Challenge

Although the national median home price declined from $375,000 to $368,000, mortgage rates continue to make homeownership expensive. Freddie Mac reported the average 30-year fixed mortgage rate at 7.32% on October 22, 2026, compared with 6.19% a year earlier.

ATTOM estimates that purchasing a median-priced home requires approximately $90,191 in annual income, while the average annual wage in its analysis was about $79,534. Even with lower prices, many buyers still struggle to afford monthly payments.

Completed Foreclosures Rise 42%

According to ATTOM’s August 2026 foreclosure report, 5,794 properties were repossessed by lenders, up 42% from a year earlier. A total of 40,277 properties received foreclosure-related filings, up 13%, while 25,894 properties entered foreclosure proceedings, up 7%.

These increases could eventually contribute to more bank-owned properties becoming available. However, not every foreclosure filing results in a property being listed for sale, and a foreclosure does not guarantee a discounted purchase price.

Where Are Home Prices Dropping?

ATTOM’s third-quarter analysis identified notable year-over-year median sale-price declines in several markets:

Baltimore City’s 27% decline stands out, although median price changes can also reflect differences in the mix of properties sold. Buyers should examine neighborhood-level comparable sales before treating these figures as evidence of individual property discounts.

Buyers Are Gaining Negotiating Power

According to Redfin, U.S. home sellers outnumbered buyers by approximately 62.6% in September 2026. The company classified 41 of the 50 largest metropolitan markets it analyzed as buyers’ markets. More competition among sellers could lead to price negotiations, concessions, or flexibility on homes requiring improvements.

Foreclosures Are Not the Only Opportunities

Traditional homes can also be offered below market value when owners need to relocate, settle an estate, sell quickly, or avoid making repairs. Some need only painting or kitchen and bathroom updates; others require major renovations. These properties are not necessarily foreclosures.

Before buying, compare asking prices with recent local sales and account for repairs, financing, taxes, and insurance. A low asking price alone does not make a property a bargain.

The Bottom Line

The combination of lower median prices, rising foreclosure activity, and more negotiating power could create opportunities for prepared buyers. At ForeclosureListings.com, buyers can explore foreclosures, pre-foreclosures, bank-owned properties, and homes priced below market value across the United States.

Explore available opportunities at ForeclosureListings.com.

By ForeclosureListings.com News Team  |  October 26, 2026