Kentucky’s Pre-Foreclosure Landscape in 2025: A Hidden Crisis Behind Falling Numbers

The Numbers Are Falling — But the Struggle Isn’t Over

By many statistical measures, Kentucky’s housing crisis appears to be easing. In May 2025, the state recorded 230 pre-foreclosure filings, down 16.36% from April and 8% from the same time last year. On the surface, this decline could imply that the worst of the housing instability brought on by pandemic aftershocks and inflationary pressures may be behind us.

But statistics can tell an incomplete story. Behind every house on the edge of foreclosure is a family confronting impossible choices: Pay the mortgage or buy groceries. Refinance or feed the kids. Stay afloat, or slowly sink. What the data hides is the quiet trauma of trying to keep a home when everything else—job stability, housing affordability, and community support—feels like it’s slipping away.

A State Once at the Epicenter of Housing Distress

To understand what today’s numbers mean, it helps to look at the trajectory. Between 2006 and 2010, Kentucky saw a staggering climb in pre-foreclosure activity, reaching its apex in 2010 with 12,224 filings. Those years, shaped by the aftershocks of the Great Recession, left scars on generations of working-class Kentuckians. The following decade brought modest recovery—fewer defaults, growing employment, and low interest rates.

Then came 2020. The COVID-19 pandemic triggered emergency moratoriums that led to a record low of just 1,437 pre-foreclosures in 2021. This temporary pause in the housing crisis masked underlying headwinds: accelerating housing prices, stagnant wages, and an uneven job market recovery.

By 2023, the number of pre-foreclosures began to climb again, rising to 2,730, and then to 3,137 in 2024. Though the 2025 count—1,320 through May—suggests a possible plateau or even a slight decline, that stability is fragile, patched together by forbearances, short-term assistance, and often, personal desperation.

The Invisible Burden on Low-Income Families

Angela Harris, a single mother living on Louisville’s south side, woke up in March to a certified letter from her bank. Delinquent for four months on her mortgage, she had quietly hoped that a tax refund or a second job would get her back on track. Instead, she found herself facing the early stages of pre-foreclosure.

“I stayed up all night Googling terms I didn’t understand—‘Notice of Default,’ ‘non-judicial foreclosure,’ ‘loss mitigation,’” she said. “And all I could think about was my daughter. Where do we go if we lose this house?”

Angela’s story is not a statistical outlier. Housing affordability in Kentucky has eroded sharply over the past five years. Although the state’s cost of living is lower than national averages, median household incomes have not kept pace with housing costs. Rising property values, increased utility bills, and inflation have created a situation where working families are spending far more than the 30% of income traditionally considered affordable for housing.

For those already living near the edge—in many cases, people of color, single-parent households, and the elderly—one missed paycheck, a medical emergency, or a broken-down car can trigger a cascade that ends in a foreclosure filing.

An Uneven Recovery: Where Is Relief Going?

There is a cold efficiency in how pre-foreclosure data is tracked: Numbers are aggregated by state, stripped of faces, names, and ZIP codes. Without county or city-level data, it’s difficult to assess whether rural areas or urban centers are bearing more of the weight, though anecdotal evidence suggests both are vulnerable in different ways.

In Kentucky’s coal country, where job loss related to energy market shifts remains rampant, families are watching their savings evaporate with no clear path toward long-term recovery. Meanwhile, urban renters-turned-homebuyers who bought during the pandemic’s low-interest boom are now contending with ballooned escrow payments and rising insurance costs, added pressures for first-time homeowners who were already stretching their budgets.