North Carolina’s Pre-Foreclosure Crisis: The Numbers Behind the Pain

A foreclosure notice is more than just a piece of paper—it’s a family’s upheaval, a mark of financial distress, and in many cases, a symptom of an economy stretched thin. In North Carolina, the latest numbers show a complicated picture: a slight uptick in pre-foreclosure properties from last month, but a steep decline compared to this time last year.

This September, 690 homes across the state entered pre-foreclosure, up 1.32% from August’s 681 but down 35.7% from September 2023’s 1,073. While the year-over-year drop may sound like good news, the reality is more nuanced.

The stories behind the statistics reveal that an increasing number of families are struggling with rising mortgage rates, inflation, and wage stagnation. For many, the fight to hold onto their homes in an uncertain economic climate is a daily battle.

A Crisis Years in the Making

To fully grasp today’s pre-foreclosure landscape, one must examine the historical backdrop.

In 2012, a staggering 38,384 North Carolina homes entered pre-foreclosure, the highest recorded number in recent history. That year marked the tail end of the Great Recession’s fallout, where foreclosures were the calling card of economic suffering.

Since then, the numbers have followed a general decline, reflecting a decade of relative economic recovery. By 2019, the state’s pre-foreclosures had dropped to 19,939, almost half of what they were seven years prior. But then came the Covid-19 pandemic, and with it, a fresh wave of housing instability.

In 2020, 14,847 pre-foreclosures were recorded—short of historic highs, but still a significant jump from 2019. Federal relief programs and foreclosure moratoriums provided homeowners some reprieve, but once those protections expired, many found themselves unable to keep up with newly resumed payments.

In 2023, 13,508 pre-foreclosure filings showed that North Carolina was still grappling with the pandemic’s long-term financial aftershocks. And with 2024’s numbers to date reaching 7,845, this year is on pace for a lower foreclosure total than the last. But does that translate to economic stability, or are homeowners simply treading water?

Who Is at Risk?

For many of North Carolina’s low-income families, pre-foreclosure isn’t just a statistic—it’s a nightmare unfolding in real time.

Take Ana Martinez, a single mother in Charlotte who has juggled two jobs trying to keep up with her mortgage after interest rates spiked last year. She fell two months behind when medical bills for her son’s asthma piled up. Now, she’s in pre-foreclosure, desperately looking for options before the bank takes her home.

Or Robert Johnson, a retired veteran in Raleigh, who has watched his fixed income erode as the cost of living keeps rising. With pension payments stretched thin and home repairs mounting, his mortgage has become unaffordable. “I did everything right,” he says. “I served my country, lived within my means. And still, I’m losing grip on my own home.”

Their stories highlight an unfortunate truth: many of those in pre-foreclosure aren’t reckless spenders or victims of their own financial mismanagement. They’re working-class people blindsided by forces beyond their control—rising mortgage rates, medical emergencies, job losses.

The Bigger Picture

While pre-foreclosures in North Carolina have fallen significantly from a year ago, monthly fluctuations suggest that the tide has not yet turned for everyone. The slight 1.32% rise from August to September suggests that mortgage delinquencies are still an issue.

Rising home prices and higher interest rates have pushed even more homeowners to the brink, particularly those who bought during the pandemic housing boom. Many who took on historically low interest rates in 2020 and 2021 are now seeing ballooning mortgage payments as temporary rate adjustments expire.

With inflation still affecting basic goods and wages failing to keep pace, financial hardship remains a reality for thousands. Those who lose their homes may face an increasingly competitive rental market where prices are soaring, further complicating their ability to regain stability.

What Comes Next?

The decline in pre-foreclosure numbers compared to last year suggests some stability returning to the housing market. However, the state’s working families are not out of the woods. A single economic shock—such as another interest rate hike or an uptick in unemployment—could send many more homes to the brink of foreclosure.

For homeowners currently in pre-foreclosure, options do exist: loan modifications, financial counseling, and refinancing programs can sometimes provide a way out. But navigating these options requires awareness and access, things that not all struggling families have at their disposal.

For policymakers, the challenge lies in ensuring that relief programs are robust enough to prevent another foreclosure crisis, while also addressing the systemic issues—rising costs of living, wage stagnation, and housing affordability—that put homeowners in such precarious positions to begin with.

Conclusion

The story of North Carolina’s pre-foreclosures is not just one of numbers but of people fighting to hold onto their homes. Though this September’s total is a far cry from past years of extreme crisis, the struggles of individuals like Ana Martinez and Robert Johnson remind us that, for many, the risk of losing a home is as real today as it was in 2012.

The data tells one side of the story. The people struggling behind those numbers tell another. And until economic stability reaches all, the fear of foreclosure will remain a reality for too many North Carolinians.