The Hidden Crisis: Hawaii’s Pre-Foreclosure Struggles in 2024

In the islands of Hawaii, where stunning beaches and lush landscapes often overshadow economic struggles, a quieter story is unfolding. Homeowners—many of them middle-class families, kupuna on fixed incomes, and working-class residents—are fighting to keep roofs over their heads.

This June, 37 homeowners entered pre-foreclosure, signaling the initial stage of a legal process that could ultimately lead to them losing their properties. That number represents an 11.9% decrease from May, when 42 homes entered pre-foreclosure, and an even more dramatic 48.6% drop from June of last year, when 72 households faced the same fate.

At first glance, this downward trend suggests an improving housing market, but the broader reality is far more complicated. Home affordability has become increasingly out of reach for many, while high costs of living, stagnant wages, and inflation have left even full-time workers struggling to make mortgage payments. The numbers may appear to be declining, but for the families at the center of the crisis, the struggle is as real as ever.

A Brief Respite, But No Real Relief

For years, Hawaii’s housing market has been subject to immense external pressures: high home prices, an influx of wealthy investors, and skyrocketing rents that make saving nearly impossible. The overall decline in pre-foreclosures from previous years mirrors the broader national trend, as homeowners have benefited from pandemic-era relief programs, lower initial interest rates in prior years, and, more recently, a strong job market.

But with interest rates remaining high and pandemic-era forbearance programs now expired, those safety nets are gone. Many Hawaii residents are still grappling with the long-term financial effects of inflation and the rising costs of food, utilities, and gas. Owning a home, once a symbol of stability and success, has become a tenuous balancing act.

Despite fewer pre-foreclosure filings month-over-month, thousands of families wake up each day worrying about how they will make their next mortgage payment. For many, the numbers in these reports are not abstract figures—they represent livelihoods, financial anxiety, and the potential loss of something deeply personal: home.

The Broader Historical Context

A look at the historical data shows just how volatile Hawaii’s housing market has been. At the height of the Great Recession, 2010 saw a peak of 8,997 pre-foreclosures, a stark reflection of economic turmoil that forced thousands of homeowners into default. Even in subsequent years, pre-foreclosures remained high, hitting 4,075 in 2011 and 3,065 in 2012.

The steady decline in pre-foreclosures over the last decade suggests a more stable market, but the streak of affordability challenges remains unchanged. In 2023, 777 homeowners entered pre-foreclosure, a number still significantly higher than seen in pre-recession years. While 2024’s year-to-date total (215 pre-foreclosures from January to June) suggests a downward trend, the second half of the year will determine whether this pattern holds—or if economic instability pushes more homeowners to the brink.

The Personal Toll of Losing a Home

Beyond the figures are individuals like Thomas and Maria S., a couple in their early sixties from Oahu who have owned their home for nearly three decades. Like many longtime residents, they have watched the cost of living in their neighborhood skyrocket. “We did everything we thought we were supposed to do,” Maria says, her voice breaking. “We bought a home back when it was still affordable, worked for 30 years, raised children. Now, even retirement isn’t enough to cover the bills.”

When Maria lost her part-time job last year, their monthly expenses—once manageable—became overwhelming. Credit card payments accumulated, and soon they found themselves behind on their mortgage. “The bank has been patient, but we’re getting letters that make it clear they won’t wait forever,” she says. “If we don’t find a solution soon, we could lose everything.”

Their story is one of thousands across the state: hardworking residents who suddenly find themselves at risk, navigating a complex system of mortgage assistance programs, legal notices, and increasingly limited financial options.

What Comes Next?

With Hawaii’s housing crisis showing no signs of easing, policymakers and community advocates face mounting pressure to provide tangible solutions. Programs offering mortgage relief, financial education, and rent-to-own opportunities exist, but access remains inconsistent and sometimes burdensome for those already struggling.

More critically, the rate of homeownership itself has become a growing concern. As more local families lose the ability to keep or purchase homes, Hawaii risks becoming a state where only those with generational wealth or outside financial backing can afford to stay. The question is not just how many homes will go into pre-foreclosure, but how long existing homeowners can withstand ongoing economic burdens.

For now, the reported decrease in pre-foreclosures is a hopeful sign, but one that requires cautious optimism. The true test will come in the months ahead, as mortgage holders continue to navigate rising living costs and uncertain market conditions. For families like Thomas and Maria, time is running out, and the question remains: Will they find a way to hold onto their home—or will they become another statistic in Hawaii’s long struggle with affordability?