Minnesota’s Pre-Foreclosure Rates Drop in May 2025 But Struggles Beneath the Surface Persist

A Hidden Strain: The Human Cost of Housing Instability in Minnesota

In neighborhoods across Minnesota, the quiet dread brought on by a foreclosure notice has become all too familiar. But while the data suggests a moderating trend in pre-foreclosures this May, the numbers obscure the mounting day-to-day pressure faced by many low- and moderate-income families.

According to recent data, Minnesota recorded 274 pre-foreclosure filings in May 2025—a substantial 29.02% decrease from the 386 filings reported just a month earlier in April. Compared to the same period last year, May 2024, when there were 376 filings, we see a 27.13% decline.

This kind of drop would, at a glance, suggest improvement. But for families like the Wagners, a two-income household in southern Minnesota struggling to keep pace with rising food, gas, and mortgage payments, this relief in the data doesn’t necessarily translate into relief at home.

“We aren’t behind on our mortgage yet,” said Anna Wagner, a teacher in Mankato whose husband works as a mechanic. “But we’ve cut everything we can. The only reason we’re still afloat is because my parents took the kids two days a week, so we’re saving on childcare.”

The Wagners are not an anomaly. They are emblematic of the growing number of Minnesotans pressed against the edge of housing insecurity—not yet in foreclosure proceedings, but walking a financial tightrope with no safety net.

Digging Into the Data: What the Numbers Show

While Minnesota saw only 274 pre-foreclosure filings statewide in May 2025, this follows several months of elevated activity. From January through May of this year, the state already recorded 1,357 filings.

To understand the trend, it’s useful to place these figures in historical context:

| Year | Pre-Foreclosure Count |
|——|————————|
| 2020 | 142 |
| 2021 | 173 |
| 2022 | 1,027 |
| 2023 | 6,777 |
| 2024 | 4,926 |
| 2025 | 1,357 (Jan–May) |

The year 2023 marked a sharp rise in pre-foreclosures after pandemic-era protections and mortgage moratoriums were phased out. Although the 2024 total filings dropped to 4,926 from 2023’s peak of 6,777, the volume remained significantly elevated compared to pre-pandemic years.

While 2025 appears, at this early point, to be continuing a downward trajectory, many experts warn that this could represent a “calm before the storm.” Inflation and higher interest rates continue to weigh heavily on struggling homeowners.

The Economic Pressures Behind the Numbers

What causes someone to fall into pre-foreclosure? The reasons vary, but some themes echo across income brackets and zip codes: delays in payments after job losses, adjustable-rate mortgages resetting at higher rates, unexpected medical costs, and lost childcare.

In Minnesota, where median home prices have climbed faster than wage growth in many areas, the burden on working families has grown heavier. According to national and local housing advocates, even a few hundred dollars in unexpected expenses can place families behind on mortgage payments.

The state has seen this before. In 2009—at the height of the Great Recession—Minnesota logged a staggering 29,710 pre-foreclosure filings. That crisis was largely driven by predatory lending and a national housing collapse. Today’s pressures are different—but no less dangerous. Instead of risky subprime loans, it’s the slow accumulation of everyday expenses that are dragging families down.

Who’s Falling Behind?

Unfortunately, granular data about which Minnesota counties or cities are experiencing the highest foreclosure rates is not currently available. Without geographic detail, we can only infer based on historical patterns and conversations with housing advocates.

Rural and inner-ring suburban areas—where many low-income households live and social supports are scarce—face the most severe impacts. Housing counselors report a rise in calls from first-time homeowners, especially those who bought during the ultra-low interest rate boom of 2021. Now, these buyers are feeling the squeeze from rising inflation and higher property taxes.

“These are families who did everything they were told to do—saved a little, bought at the right time,” said John Allen, a counselor with a nonprofit housing support organization based in Minneapolis. “Now they’re watching their equity evaporate and their mortgage payments go up.”