Foreclosure Crisis Eases in Georgia, but for Struggling Homeowners, the Pain Persists

After months of rising pre-foreclosure numbers, June finally brought some relief to struggling homeowners across Georgia. The state saw 861 pre-foreclosures in June 2024, a 17.6% decline from May’s 1,045 cases. Even more significantly, pre-foreclosures have plummeted 41.7% compared to June last year, falling from the staggering 1,476 homeowners who teetered on the brink of losing their homes in June 2023.

But behind those percentages are families still living in fear, working extra hours, renegotiating loan terms, or facing the heart-wrenching reality that they may have to pack their belongings and leave behind the homes they built.

A Welcome Dip, But the Crisis Isn’t Over

For housing advocates, the steady decline in foreclosures is a welcome reprieve. The worst of the crisis—at least when compared to historical highs—seems to be behind us. The state, which saw an explosion of foreclosures in the wake of the 2008 financial crisis (culminating in 189,530 pre-foreclosures in 2010), has made strides in stabilizing homeownership.

Yet, the sharp rise between 2021 and 2023 underscores the continued vulnerability in Georgia’s housing market. In 2021, Georgia recorded just 470 pre-foreclosures for the entire year. By 2023, that number had skyrocketed to 15,861—a nearly 3,300% increase in just two years.

This year, a slowdown is apparent, with 7,125 pre-foreclosures from January to June 2024. But the damage has been done. For many homeowners, the scars remain.

The Hidden Costs of a Cooling Market

With mortgage rates still elevated, inflation eroding wages, and property taxes rising in some parts of the state, many homeowners have found themselves unable to keep pace.

“We tried everything—cutting back expenses, working overtime—but it just wasn’t enough,” said Jason Caldwell, a father of three in the Atlanta suburbs. Caldwell purchased his home in 2020 with a historically low-interest rate. But as property values rose, so did his taxes and insurance costs. A surprise car repair and an unexpected medical bill tipped his budget into unfamiliar territory. By late 2023, the couple had missed two mortgage payments, triggering a pre-foreclosure notice in February.

“There’s this feeling of shame, like you failed somehow,” Caldwell said. “But we did everything we were supposed to do.”

Caldwell’s story is not unique. Housing affordability has become a crisis, particularly for low-income families who were just starting to gain a foothold into homeownership.

What’s Stemming the Tide?

So, if homeowners are still struggling, why have pre-foreclosures declined so significantly?

Experts point to three contributing factors:

1. Lender Flexibility – Banks and mortgage servicers have become far more willing to renegotiate loan terms rather than foreclosing altogether. After the mass foreclosures of the 2010s, lenders have learned that negotiating is often cheaper than the costly legal process of reclaiming and reselling a home.
2. Government Assistance – Homeowner assistance programs rolled out after COVID-19, such as mortgage relief funds and tax abatements, have provided temporary relief for some struggling borrowers. While those funds are drying up, they may have helped prevent a larger wave of pre-foreclosures this year.
3. Consumer Awareness – More homeowners today understand pre-foreclosure processes and seek help earlier in the cycle. Housing counseling services have reported an increase in calls from homeowners looking for solutions before missing multiple payments.

What’s Next?

Despite signs of improvement, experts remain wary. While June numbers suggest a downward trend, the broader economic challenges of inflation, disposable income shrinkage, and fluctuating mortgage rates could reverse progress in the second half of the year.

For homeowners like Jason Caldwell, the fight isn’t over. “We’re okay for now,” he says. “But everything feels so fragile. One more emergency, and it could all come crashing down again.”

Georgia may have stemmed the worst of the foreclosure wave—but for many families, the road to real stability remains uncertain.