Pre-Foreclosure Rates in North Carolina: A Quiet Crisis Beneath the Surface

A State of Uneasy Relief: Behind the Decline in North Carolina’s Pre-Foreclosures

In a year fraught with cost-of-living increases, rising interest rates, and growing anxiety about affordability, North Carolina’s housing market appears, at first glance, to be weathering the storm. According to the latest housing data, North Carolina recorded 690 pre-foreclosure filings in September 2024, reflecting a modest 1.32% increase from the 681 recorded in August. But when we expand the lens, a more complex and layered story emerges, one that is less visible from the surface metrics.

Compared to September 2023, which saw 1,073 homeowners fall into pre-foreclosure, this year’s number reflects a 35.7% decline. Some might see this drop as a sign of resilience, an indication that government relief measures, job recovery, or wage increases are helping families stay afloat. But for many homeowners, particularly in working-class and rural areas, the narrative is far more personal and more precarious.

A Home at Risk: Struggling Beneath the Numbers

In communities tucked between Asheville’s blue ridge slopes and the sandy edges of Wilmington, stories persist like an undercurrent. People like Sharon M., a 56-year-old home health aide from eastern North Carolina, live on the edge of housing insecurity despite doing everything “right.” Sharon and her husband purchased their modest single-story home a decade ago. After his construction job dried up during the pandemic, they struggled to make ends meet.

A pandemic-era forbearance program provided temporary relief, but the debt didn’t vanish, it merely paused. “We were treading water. And now that pause is over, we’re falling behind,” Sharon says, holding back tears. She’s now behind on two mortgage payments, and the notices have begun to arrive.

She is not alone. While foreclosures are down from last year, the symbolic weight of that decrease might be masking deeper housing anxieties. For many, the storm is still gathering strength.

Decoding the Trend: Is the Decline in Pre-Foreclosures Real?

Looking at the year-to-date trends, pre-foreclosure activity in North Carolina appears to be slowing in 2024. As of September, there have been 5,383 pre-foreclosure filings statewide, which puts the state on pace for roughly 7,000 to 7,200 filings by year’s end, significantly lower than the 14,274 recorded in 2023.

Yet, this apparent reprieve is less about financial wellness and more about deferment and uncertainty. The drop can partially be attributed to lenders slowing the foreclosure process, legal backlogs, and homeowners seeking loan modifications, short sales, or government assistance programs. It’s also possible that rising home values have enabled more people to sell or refinance before losing their homes outright.

However, the brewing storm clouds include rising insurance premiums, inflation-driven household costs, and still-stubborn wage growth that hasn’t kept up. A job loss, unexpected illness, or even a temporary reduction in hours can devolve into a housing emergency.

Historical Context: The Long Arc of North Carolina’s Foreclosure Trend

To appreciate the current figures, we must view them against the larger backdrop of North Carolina’s housing history. In 2012, foreclosure activity peaked at 43,794 filings, the aftermath of a mortgage crisis that slammed the brakes on a decades-long housing boom. Since then, the numbers trickled downward, reaching a low in 2021 at just 4,330 filings, a lull hailed as a product of foreclosure moratoriums and federal relief programs rolled out during the height of the COVID-19 pandemic.

But as those protections expired, the market began to reawaken in 2022 and 2023, when foreclosures started to rebound. While 2024’s drop so far may seem like a return to equilibrium, it’s essential to distinguish between strategic avoidance of foreclosure and genuine financial stability.

Conclusion: Behind Every Filing, a Family

Data gives us numbers, but housing tells a story. And every one of the 690 pre-foreclosure filings in North Carolina this September represents a crisis unfolding in real-time. A job lost, a bill unpaid, a dream deferred. The numbers may have dropped from a year ago, but the struggle remains achingly real and for many North Carolinians, dangerously close.

In a state whose landscape is changing fast, where luxury construction continues apace and property values soar, more families than ever are struggling to hold on to what they have. And if history is any guide, the downturns are always hardest on those already one step behind.

Until we confront the deeper structural inequalities that underlie housing insecurity, we may continue to note market “improvements” while quietly turning the page on disappearing neighborhoods and forgotten voices.