Arizona’s Pre-Foreclosure Decline in 2024 Masks a Deeper Housing Struggle

PHOENIX — On a quiet cul-de-sac in West Phoenix, Maria Lopez sits at her kitchen table, staring at a stack of overdue mortgage statements. Each envelope represents another missed payment, another step closer to foreclosure. “I’ve worked two jobs, cut every corner,” she says, her voice edged with exhaustion. “But everything keeps getting more expensive, and my paycheck doesn’t stretch like it used to.”

Lopez is not alone—far from it. Every month, hundreds of Arizona homeowners like her edge closer to losing their homes, caught in a tightening vise of rising costs, stagnant wages, and interest rates that remain persistently high. This year, however, the number of pre-foreclosures in Arizona has been declining.

By the Numbers: A Sharp Decline in 2024

According to recent data, Arizona saw 466 pre-foreclosure filings in June 2024, marking a 14.5% drop from May 2024 and a 25.6% decline from June of last year. This suggests that fewer households are currently at risk of losing their homes compared to previous months and years.

At first glance, this appears to be good news. But step back, and a more complex picture of Arizona’s housing market emerges.

A Long Road Down From Crisis

Arizona’s foreclosure crisis is hardly a new phenomenon. At the peak of the Great Recession, in 2009 and 2010, the state saw an astronomical number of pre-foreclosures, topping 164,553 in 2009 alone. The years following the recession brought gradual relief as homeowners recovered, government assistance programs helped stabilize the market, and banks tightened lending practices.

By 2021, pre-foreclosures had dropped to 1,847, the lowest level in nearly two decades. But as the pandemic-era mortgage relief programs expired and inflation surged, the numbers started ticking back up. By 2023, Arizona reported 7,755 pre-foreclosures—quadruple the number seen just two years prior.

2024’s trend, with 3,365 pre-foreclosures in the first half of the year, suggests another decline. Experts warn that this does not necessarily mean housing affordability is improving.

Why Are Pre-Foreclosures Declining?

There is no singular reason why Arizona’s pre-foreclosures have dipped in recent months, but a combination of economic shifts and homeowner behaviors may be responsible.

• Rising Home Values and Equity:
  Many homeowners who risked foreclosure in previous years have been able to leverage equity to refinance or sell their homes at a profit rather than fall into default. Even with high mortgage rates, the Arizona housing market has sustained enough demand to keep home prices from collapsing, offering struggling homeowners a financial exit.
• More Loan Modifications and Assistance Programs:
  Banks and lenders, now more cautious after the 2008 crisis, are often working with homeowners through loan modifications or payment deferral plans rather than moving swiftly toward foreclosure.
• A Slowing Economy and Mortgage Rate Impact:
  While inflation has cooled somewhat, many middle-class and low-income homeowners continue to struggle with increased costs for everyday necessities. High mortgage rates have also limited new homebuyers, which, paradoxically, has discouraged a wave of forced sales or auctions.

Who is Still at Risk?

Despite the overall decline, for many, the housing market remains an unforgiving landscape. The data, while promising in broad strokes, obscures the reality faced by those still teetering on the edge.

The highest concentration of pre-foreclosures is typically found in Maricopa County, which includes Phoenix, as well as Pima and Pinal Counties. Within these areas, cities such as Phoenix, Tucson, and Mesa often lead in distressed properties—places where working-class families are being squeezed by rising rents, unpredictable expenses, and limited wage growth.

For homeowners like Maria, whose take-home pay has barely budged while property taxes and insurance premiums inch higher, the relief that foreclosure rates are falling is little solace. “It’s a waiting game,” she says. “People like me are just trying to hang on.”

A Cooling Market, But Not a Fixed One

It would be tempting to look at Arizona’s quarter-over-quarter drop in pre-foreclosure filings and assume the danger is fading. Instead, the realities on the ground tell a more nuanced story: Homeowners are stretching themselves thin to avoid foreclosure, selling homes before defaulting, or refinancing under far-from-ideal terms.

Arizona is not in a housing crisis like the one seen in 2008, but thousands of families remain at risk, just one missed paycheck away from losing their homes. While the state’s broader foreclosure figures offer a hopeful trend, they obscure the daily financial anxieties and sacrifices of people, like Lopez, fighting to hold onto the roofs over their heads.

For those homeowners, the deeper question remains unanswered: How long can they hold on?