Arizona Pre-Foreclosure Crisis in 2025: Behind the Numbers, the Human Cost

A State in Flux: Arizona’s Struggle with Pre-Foreclosure in 2025

What happens when rising mortgage debt outpaces rising incomes? For hundreds of Arizona families, the answer is foreclosure—not in the abstract sense of market analysis, but in the eviction notices on windows and the packed-up boxes by the door. In May 2025, Arizona recorded 591 pre-foreclosure filings, a painful tally in a state still bearing the economic scars of the pandemic, inflation, and a rapidly changing housing landscape.

This figure reflects a nearly 20 percent drop compared to April 2025, when 730 properties were marked as in pre-foreclosure. Yet, viewed over a longer timeline, it becomes evident that deeper worrying patterns are beginning to form—and families across the state are paying the price.

While the month-over-month decline might seem encouraging at face value, compared to the same time last year, the state has seen an 8.44% increase in pre-foreclosures, highlighting what may be the beginning of a broader rebound of distress in the housing sector. In May 2024, 545 properties were in pre-foreclosure. That number has risen to 591.

To understand this uptick is to examine a tangle of forces—economic pressure, wage stagnation, climbing mortgage interest rates, and a sharp divergence between property values and working-class incomes.

A Long Recovery Fading into a New Struggle

Arizona’s housing crisis isn’t born in 2025. It is merely the latest chapter in a saga that saw its most dramatic spike in 2009, during the depths of the Great Recession, when over 164,000 homes entered pre-foreclosure. Back then, entire neighborhoods in Phoenix and its surrounding suburbs were emptied almost overnight, ghost suburbs slowly filling with investors instead of families.

Since then, the numbers dropped steadily, reaching just over 2,100 in 2021—a historic low. It was, for a moment, a housing market that felt genuinely stable.

But as anyone watching the housing economy closely knows, stability is never permanent—and never evenly distributed.

Beginning in 2022, pre-foreclosure counts began to climb again. Arizona recorded 7,857 pre-foreclosures in 2022, a stark rebound from the preceding years. That trend held steady into 2023 (7,478) and 2024 (7,265), suggesting that what many hoped was a post-pandemic return to normalcy became a return to uncertainty.

So far this year, 2,826 pre-foreclosure filings have occurred between January and May of 2025—meaning Arizona is on track to slightly exceed 2024 if trends continue. This slow upward grind raises uncomfortable questions: Are current policies enough to stabilize homeowners facing economic hardship? Or are we once again on the front edge of a foreclosure wave?

The Numbers Don’t Scream—but They Wound

To understand what 591 pre-foreclosures mean in May 2025, it helps to leave the statistics pages and step into real homes.

There’s Maria Castillo, a single mother of two in Mesa, who lives just 45 minutes from downtown Phoenix. Last year, she refinanced her mortgage when interest rates were still climbing—pressured by childcare costs and medical bills. Her new adjustable-rate mortgage saved her money for a few months. But in March her payment jumped by $220. In April, she missed it. Now, in May, Maria received her first notice of default.

“They say I have 90 days,” she says. “Ninety days to come up with money I don’t have.”

Maria’s story is not an outlier. She is part of a growing cohort of homeowners who sit precariously between solvency and crisis. Many bought homes during the frenzy of 2021 when low interest rates and high demand tempted families to stretch their budgets thin. Now, inflation has driven up the cost of everything from milk to utilities, and wage growth has not kept up. A missed paycheck here, a car repair there—and suddenly, foreclosure becomes imminent.

“We’re seeing more people caught off guard,” says Juan Morales, a housing counselor in Tucson. “They believed they were in a stable financial situation, but the groundwork wasn’t stable enough to withstand even modest economic pressure.”

No County Breakdown, but a Statewide Stress

While data limitations prevent us from diving into specific counties or cities, anecdotal evidence points to greater stress in lower-income communities and exurban areas—places where wage growth remains stagnant and commutes have grown ever longer due to housing displacement.

“We’ve had to move farther out just to afford a home,” says Terrell Adams, who lives in the outskirts of Glendale. “But then when gas hits $5 a gallon and the truck breaks down? You’re missing work, you’re missing pay, and suddenly you’re missing a mortgage payment.”

Without localized data, it’s hard to map where foreclosures are surging fastest. However, experts in housing policy warn that Arizona’s rapid growth and modest income base leave many households vulnerable, especially when the economic tides shift.