Texas Investors: Are Foreclosures Creating More Buying Opportunities in 2026?

Question

I've been following the foreclosure numbers lately, and there are some interesting trends worth watching.

According to ATTOM's August 2026 report, Texas had 3,126 foreclosure starts and 1,835 completed foreclosures in a single month. Houston alone accounted for 448 completed foreclosures. Nationally, FHA-backed foreclosure auctions have also increased significantly, rising 47% year over year in Q2.

For investors, this could mean more opportunities to find distressed properties, whether through courthouse auctions, bank-owned properties (REOs), or working with owners before a foreclosure is completed.

Of course, a foreclosure doesn't automatically equal a good deal. Repairs, title issues, liens, occupancy, and the property's true market value all need to be considered carefully—especially when buying at auction.

I'm curious how other Texas investors are approaching this market:

• Are you actively looking at foreclosure auctions or bank-owned properties?
• Have you noticed more opportunities compared with a year ago?
• Are you finding better deals through auctions, REO listings, or directly from distressed sellers?

Are you actively looking at foreclosure auctions or bank-owned properties?

Have you noticed more opportunities compared with a year ago?

Are you finding better deals through auctions, REO listings, or directly from distressed sellers?

With foreclosure activity rising, I'm interested to hear whether investors are actually finding better buying opportunities—or simply seeing more properties come through the pipeline.

Chris Seveney · Answer

While the numbers have increased over the past year, I recommend checking what those numbers are compared to 2015 to 2019. In most jurisdictions, you're going to find we're still below foreclosure rates from that time period. While they have "surged" over the last year, that is because they've been at all-time lows since COVID, and, like anything, it reverts back to a mean.

Jay Hinrichs · Answer

I find every market has their whales IE companies that are set up to dominate foreclosure activities as a full time gig. One off investors will have a very difficult time competing and most of the time should just wait for the distressed stuff to hit the OREO brokers. Auction.com etc..

Alejandro Lopez · Answer

Volume is definitely up across Harris County, but the courthouse steps on the first Tuesday of the month are still packed with capital bidding properties up to 85% to 90% of ARV—often completely blind to occupied eviction timelines, back taxes, or surviving junior liens.

The real meat right now isn't competing at the steps or waiting on stale REO lists; it’s getting to owners 30 to 60 days before the auction date to clear the title hurdles and reinstate the note before the trustee sale ever happens. Higher volume in the pipeline hasn't made buying at auction any easier—it just means the real spread is strictly found upstream.

Dan Worth · Answer

Chris's point about comparing to 2015–2019 is a good one. In the Allegheny County, PA data I track, 1,258 properties had a mortgage foreclosure filed in the last 12 months, and the filing on its own rarely makes the deal. The ones worth a closer look usually also have back taxes, open code violations, or an absentee owner.

Jay Hinrichs · Answer

OH Drew I can tell some stories I was one of those whales back in the day LOL> And WAAAY back when I was doing HML in Oakland there was a foreclosure outfit in my same office on the same floor.. they were full blown gangsters.. guns suitcases of cash and a Rolls Royce !!!

Drew Sygit · Answer

Yeah and many of those "whales" don't play by the "rules"🙃

Alejandro Lopez · Answer

Seeing the uptick on the ground here in Houston, but more volume hasn't automatically translated to wider margins. On the courthouse steps, competition is still pretty aggressive—institutional buyers and experienced cash groups are bidding anything with a clean title up to 80–85% of ARV. Once you factor in unseen foundation or plumbing repairs, carrying costs, and potential eviction timelines, the risk-to-reward ratio gets thin very quickly.
The surge in FHA notices is especially telling. A lot of those recent borrowers put 3.5% down, which means there often isn't enough equity spread for a traditional deep-discount purchase unless you're exploring creative debt-relief structures. It feels like there's definitely more raw inventory flowing through the pipeline right now, but you have to filter through five times the noise to find a deal that actually pencils. Are you seeing better luck working files direct-to-borrower, or mostly tracking the auction block?

Texas Investors: Are Foreclosures Creating More Buying Opportunities in 2026?

Texas Investors: Are Foreclosures Creating More Buying Opportunities in 2026?

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