Residential Foreclosures Tick Up in Austin

Foreclosures are becoming more common in Austin. But despite the city’s post-pandemic bringdown, its housing market still has a long way to fall.

Home foreclosures have increased this year in Austin compared to both recent and historic averages, and the city’s rise in foreclosure rates led the nation last month. Alongside employment issues, depreciation throughout the Austin area contributes to the trend. However, Austin home values for the most part remain high compared to pre-pandemic norms.

Last month, Austin saw a higher spike in foreclosure rates than any other city in the nation, according to TRD Data. Foreclosure filings, including default notices, scheduled auctions or bank repossessions, marked roughly one in every 2,000 homes in April 2026, representing the eighth-highest share among markets with at least a million residents and a chart-topping increase of 199 percent compared to April 2025.

Homeowners who bought four to five years ago, especially first-time homebuyers who issued Federal Housing Administration loans with a slim down payment, are most likely to be underwater, TRD Data reported. The average sale price of an Austin home peaked in 2022 at $625,800, and it’s fallen 8 percent since then to $570,500, according to the Texas Real Estate Research Center — leaving outlooks grim for borrowers whose down payment covered just 3.5 percent of a 2022 home.

In addition to the year-over-year spike in foreclosure filings, the Austin marketplace has experienced month-over-month growth in foreclosure listings since the fall. Almost 2,500 bank-owned homes, auction properties and pre-foreclosure properties were listed in mid-March, a 13 percent increase from September’s count of 2,200, according to Team Price Real Estate.

Vaike O’Grady, market research advisor at Unlock MLS, cautioned against expecting a “widespread market disruption.”

“From 2007 through 2022, foreclosure listings typically accounted for between 0.15 percent and 0.50 percent of active listings across the region,” O’Grady said, referring to the Austin-Round Rock-San Marcos statistical area. “Through the first five months of 2026, that figure has averaged approximately 1.4 percent, which is still a relatively small share of the overall market and more reflective of broader national housing trends than a localized issue in Austin.”

Austin still remains one of the most overvalued housing markets in the country, trailing only Newark, New Jersey, and the Philadelphia area, according to Fitch Ratings. While some sectors of the Austin housing market underwent significant distress, such as condos, certain luxury neighborhoods and outlying suburbs, home prices overall held flat within Austin city limits, according to the Austin Board of Realtors. The median sale price of a home in Austin proper was $570,000 in 2025, just 0.6 percent less than the 2024 median of $573,000. Williamson County to the north saw a more significant decline in home values with a 2.8 percent median sale price decline, year over year, to $417,000 in 2025.