Nebraska’s Pre-Foreclosure Rates Are Falling, but For Struggling Homeowners, the Crisis Feels Far From Over

Susan Meyer never thought she would end up here—her mailbox stuffed with letters from the bank, each one more urgent than the last. From her small ranch house in Omaha, where she has lived for nearly two decades, she describes a slow unraveling that started with inflation eating away at her paycheck, then spiraled into an inescapable financial sinkhole. First, it was the rising grocery bills, then a sudden health scare that drained what little savings she had left, and finally, a missed mortgage payment. One turned into two, and before she knew it, she was staring down foreclosure.

“I’m working overtime just to stay afloat,” she says, exhaustion tugging at her voice. “But it never feels like enough.”

Meyer isn’t alone. Across Nebraska, homeowners are still reeling from the aftershocks of the pandemic-era economy. Yet, despite individual struggles like hers, the state is seeing marked improvement in its pre-foreclosure numbers. In June 2024, Nebraska recorded just 68 pre-foreclosures, representing a 15% decline from May and a staggering 40.87% drop from June of last year. It’s a sign that, on paper, fewer homeowners are at immediate risk of losing their homes.

But step beyond the statistics, and a harsher reality emerges.

The Numbers Tell a Story of Decline—But Not for Everyone

Pre-foreclosure—the stage where a homeowner has defaulted on their mortgage but has not yet lost their home to foreclosure—has long been a harbinger of deeper economic distress. A sharp decline in cases should be a good sign. And in many ways, it is.

Looking at historical data, Nebraska’s pre-foreclosure rates have been falling since their 2012 peak of 2,658 cases. The state’s numbers declined significantly after 2016, and by 2021, they hit a low of 438 total cases for the year. Even the turbulence of 2022 and 2023, in which numbers rose to 1,517 and 1,352 cases respectively, seems to have eased.

2024 recorded just 460 pre-foreclosures statewide through June, putting it on pace for another decline. On the surface, this suggests a housing market and economy that are stabilizing. Mortgage delinquency rates are down, employment numbers remain strong, and inflation—while still a source of pain for many—has slowed from its record highs.

But while fewer homeowners may be falling into pre-foreclosure, those who do are finding it harder than ever to escape.

A Housing Market That Has Outpaced Wages

Part of the reason pre-foreclosures remain a crisis for some Nebraskans is that wages haven’t kept up with housing costs. In many cities across the state, home values have surged, making it harder for lower- and middle-income families to afford their monthly mortgage payments, especially when hit with unexpected expenses.

“You see the listing prices going up, rents going up, interest rates still relatively high—and yet wages? Those haven’t budged much at all,” says Robert Diaz, a housing counselor in Lincoln who works with homeowners at risk of default. “It’s creating a situation where people who fall behind on their mortgage payments are finding fewer options to get back on track.”

Diaz points to rising home insurance costs, property taxes, and the cost of essentials like gas and utilities as unseen pressures squeezing Nebraska families. Unlike previous years where struggling homeowners could sell their homes in a hot market to avoid foreclosure, higher borrowing costs have made buying a home less accessible, leaving some homeowners trapped in unsustainable financial situations.

“We used to be able to tell people, ‘If you can’t make the payments, you can sell and at least walk away without losing everything,’” Diaz says. “Now, with fewer buyers and higher rates, that’s not always an option.”

The Human Consequences Behind the Declining Pre-Foreclosure Numbers

For families on the edge, even a small financial setback can rapidly escalate into losing their home. Some, like Meyer, have resorted to taking on second or third jobs, while others are seeking relief programs—though many of these are temporary or hard to qualify for.

John Carpenter, a single father in Grand Island, recently exhausted a pandemic-era mortgage assistance program that helped cover his payments when he lost his job in 2021. After struggling to find a job with comparable pay to what he had before, he fell behind again—this time with no government aid to cushion the blow.

“I thought I made it through the worst of it,” he says. “But I’m right back where I was—only now, there aren’t any safety nets.”

Carpenter represents a growing number of homeowners who aren’t technically captured in the pre-foreclosure data, but who are teetering on the edge of financial ruin. They make their payments—barely—but at the expense of groceries, medical care, or other essentials. These are the “invisible” cases: households that could easily slip into default with just one financial emergency.

Looking Ahead: Will Pre-Foreclosures Keep Falling?

The current trajectory suggests fewer Nebraskans will enter pre-foreclosure in 2024 compared to 2023. It’s a hopeful sign that, for many, financial stability is returning. For families already struggling, a continued decline in pre-foreclosures doesn’t mean the economic storm has passed.

The key question is whether economic conditions will improve for those still on the brink. If wages rise and inflation continues its gradual cool-down, fewer homeowners will default on their mortgages. But if interest rates remain high and living costs keep squeezing families, then pre-foreclosure numbers could plateau—or even rise—despite broader economic gains.

For now, the data tells one story: Nebraska’s housing market is stabilizing. But behind those numbers, many still live in uncertainty, holding their breath, hoping this month’s paycheck is enough to keep a roof over their heads.

For Susan Meyer, the fight isn’t over yet. “I just need one break,” she says, shaking her head. “Just one.”