Interest rates are severely impacting the market, leading to properties sitting unsold for over two years. Homeowners are reducing prices to avoid foreclosure, which lowers appraised values, causing concern for investors. A July 2025 survey revealed that 38% of buyers feel less willing to purchase, while 37% plan to acquire more auction properties. Increased foreclosure rates have resulted in more real estate-owned auctions, primarily consisting of vacant properties. This influx is beneficial, as it allows for more housing supply and accessibility for inexperienced buyers.
The interest rates have killed the market, a Texas-based Auction.com buyer wrote in response to a buyer survey conducted in the second week of July.
Existing homes have crashed. Homeowners are starting to drop prices to sell homes to ward off foreclosure, which is creating a lower appraised value nightmare for investors.
The rise in foreclosures has led to more properties ending up in real estate-owned (REO) auctions, especially as fewer are being bought by third-party buyers.
It's also good news for less experienced auction buyers, including even owner-occupant buyers, because these vacant properties are typically more accessible, allowing for interior access.
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