Iowa’s Pre-Foreclosure Numbers Rise in June, but Homeowners Still Face an Uncertain Future

For many homeowners in Iowa, the words “foreclosure notice” arrive like an unwanted guest—expected, perhaps, but never welcome. This month, 235 families across the state received the warning that their homes may soon no longer be theirs. It’s an increase of 13.5% from May, a worrying sign that economic pressures are continuing to push people to the edge.

But while this most recent uptick is troubling, the broader picture appears more stable—at least for now. Compared to this time last year, there are 24% fewer pre-foreclosures, a sign that the post-pandemic foreclosure wave may be leveling off. Even so, for those caught in the storm of financial distress, the numbers offer little comfort.

One Home, One Missed Payment, One Crisis Away

For Jennifer Carlson, a single mother of two in Des Moines, the financial spiral began with a single event: a layoff. She worked in customer service for a mid-sized logistics company until a round of cuts last winter left her jobless. With rent prices still rising, she had taken the leap into homeownership in 2019, confident her steady income would cover the mortgage. Then came the job loss, the late bills, and eventually, a notice from her lender.

“I thought homeownership would be my family’s security,” Jennifer said. “Now I wake up every day wondering if we’re going to lose it all.”

Jennifer’s story is not unique. As inflation continues to force up the costs of food, gas, and utilities, many families, particularly those in the working class, are finding that a single setback—an unexpected medical bill, a broken-down car, a temporary job loss—can put their home on the line.

A Decade of Rising and Falling Foreclosures

Looking at the bigger picture, pre-foreclosures in Iowa have been on a rollercoaster ride for the past two decades. The numbers surged to their highest point in 2012, when 9,403 homes entered pre-foreclosure, a direct consequence of the 2008 financial crisis and its lingering economic fallout. Since then, foreclosures have largely been in decline, though there have been smaller spikes along the way—most notably in the aftermath of the COVID-19 pandemic, which disrupted incomes and financial security nationwide.

The pandemic itself created an artificial pause in the foreclosure process. Moratoriums put in place from 2020 to mid-2021 gave struggling homeowners temporary protection. That year, Iowa recorded its lowest foreclosure figures in nearly two decades, with just 1,469 cases. But as those protections lifted, the numbers crept back up: by 2023, 4,065 homes were at risk once again.

So far in 2024, there have been 985 pre-foreclosures reported through June, suggesting the state is on pace to record a lower number than last year—if the trend holds.

But holding onto stability is no simple task when even minor economic shocks can have deep ripple effects.

The Real Cost of Inflation and Stagnant Wages

While home prices in Iowa have not ballooned as dramatically as in states like California or New York, they have risen steadily, outpacing wage growth for many workers. Combine that with interest rates still lingering at higher-than-normal levels, and the stress starts to show in mortgage delinquency rates. Even homeowners who bought their homes when rates were low in 2020 or 2021 are now struggling with higher property taxes and insurance premiums.

“I never refinanced because my original rate was low,” said Carlos Mendoza, a retired factory worker from Cedar Rapids. “But that doesn’t help when everything else is going up. My groceries cost more, my water bill is higher, and now it feels like my paycheck doesn’t cover what it used to.”

These incremental increases may seem manageable to some, but for those living paycheck to paycheck, they chip away at financial stability, making it more difficult to recover from unexpected expenses.

The Path Forward: Will Pre-Foreclosures Keep Declining?

The question now is whether this year’s relative stability in pre-foreclosure numbers will hold—or if June’s month-over-month increase is an early warning sign of trouble ahead. Iowa’s job market has remained stable, but if inflation persists or another economic slowdown emerges, more homeowners could find themselves in a financial squeeze.

Some local organizations offer hope. Nonprofits and legal aid groups continue to provide mortgage counseling and foreclosure prevention services to struggling families. Iowa’s “Save the Dream” program, launched in the wake of the pandemic, has helped many avoid foreclosure through temporary relief grants—but those funds are dwindling.

For now, the numbers suggest the worst may be behind Iowa homeowners. But for the hundreds of families receiving pre-foreclosure notices this month, the pain remains immediate, personal, and deeply unsettling.

“I just need a little more time,” Jennifer Carlson said, shaking her head as she looked at the foreclosure papers on her kitchen table. “I’ve fought so hard for this home. I don’t want to lose it now.”

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Final Thoughts

June’s 13.5% increase in pre-foreclosures from last month is concerning, but it doesn’t yet indicate a full resurgence of Iowa’s foreclosure crisis. With a year-over-year decline of 24%, there is still reason for cautious optimism. Yet, that broader trend won’t matter to the individuals caught in the fluctuating tide of America’s housing affordability crisis.

As we move into the second half of the year, all eyes will be on whether the slightly improving foreclosure trend holds—or if rising costs and financial pressures will once again push more homeowners toward the brink.