Oregon’s Pre-Foreclosure Landscape: Fewer Homes in Distress, But Struggles Persist

A Shrinking Crisis Hides the Human Cost

When housing distress hits, it doesn’t knock, it crashes through the front door. For many Oregon families, that intrusion has been softened in 2024. Pre-foreclosure rates, early warning signs before a home heads to auction, have dropped sharply from last year. According to recent data, Oregon reported 117 pre-foreclosure properties in September 2024, down from 128 in August and significantly lower than the 287 reported in September 2023.

That’s an 8.6% decrease from the previous month and a staggering 59.2% year-over-year drop. On the surface, these numbers seem to signal relief in Oregon’s beleaguered housing market. But behind these statistics are hundreds of stories that rarely make it to glossy real estate brochures or developer marketing packages. These are the stories of people like Maria Lopez in Salem, who hasn’t missed a mortgage payment yet but lies awake every night wondering how long that will last.

“I work two jobs,” Maria said. “But everything else is more expensive. Gas, food, utility bills. How can anyone keep up when every paycheck is already gone by the time it hits your account?”

The Numbers: A Market in Transition

Let’s unpack what the data tells us. Oregon has seen vast shifts in its pre-foreclosure history. At the peak of the subprime mortgage crisis, the state reported more than 45,000 pre-foreclosures in 2011. Back then, homeowners fell like dominoes, many buying homes with little more than a signature and ending up trapped under underwater mortgages when the Great Recession hit.

But since 2012, foreclosure activity steadily fell as sweeping state and federal regulations tightened lending standards and improved homeowner protections. The pandemic, oddly enough, brought numbers down even further. Evictions were paused, forbearances became widespread, and interest rates hit historic lows.

In 2021, Oregon saw its lowest number on record: just 356 pre-foreclosures. That honeymoon was brief. As early protective policies expired and inflation spread like wildfire, the state recorded a rebound in 2022 with 1,790 pre-foreclosures, followed by a steeper jump in 2023 to 3,316.

As of September 2024, Oregon has logged 886 pre-foreclosure filings across the first nine months of the year. If this pace holds steady, roughly 98 per month, the state could close 2024 with around 1,175 to 1,200 total pre-foreclosure. That would mark a substantial drop from the previous year and suggest a potential stabilization.

Still, in housing markets, the numbers don’t always tell the full story.

The Hidden Stress: Low-Income Households on the Brink

The improved statistics obscure a crucial fact, the modest decline in pre-foreclosure activity does not mean the pressure on homeowners has eased. In fact, for many low- and moderate-income households, that pressure may be greater than ever.

Take Eugene’s Sheila Thomas, a single mother of three whose adjustable-rate mortgage reset this summer. Her monthly payments jumped by almost $400. She now commutes 90 minutes to a part-time job that doesn’t offer benefits.

“I’ve worked hard to hold on to this house for ten years,” Thomas said. “But this year, it feels like I’m losing ground no matter what.”

Like Sheila, many homeowners are discovering that the true long tail of the pandemic is economic instability. Rapid inflation from 2022 to 2023 pushed up the costs of everyday living, while interest rates remained high, making refinancing largely out of reach. Although wages have risen nominally across several sectors, they haven’t kept pace with inflation, especially for Oregon’s working class, disabled citizens, and seniors on fixed incomes.

These are not the people behind speculative real estate booms. They are schoolteachers, caregivers, warehouse clerks. People often have one unexpected repair, one medical bill, or one missed paycheck away from missing a mortgage payment.

The Pre-Foreclosure Conundrum: Hiding in Plain Sight

Despite the improving numbers, including a lower monthly total than Oregon saw at any time in 2023, concerns linger. The steep year-over-year drop must be considered alongside broader financial trends: rising credit card defaults, ballooning student loan burdens, and early signs of softening in the labor market. Many experts worry that homeowners. Particularly those with FHA loans or minimal equity may be propping themselves up through deferrals, credit, and unsustainable second jobs.

In other words, the crisis isn’t gone, it’s just hiding better.

“Pre-foreclosure data is a snapshot of what’s visible,” said Teresa Benson, a nonprofit housing counselor in Portland. “What we don’t see are the folks juggling bill collectors, racking up debt, or silently defaulting on smaller obligations while trying to protect their home.”

Indeed, the pre-foreclosure process in Oregon allows for a wide margin of invisibility. Homeowners may be months behind before a formal notice of default is filed. And with banks now more cautious and homeowners more savvy, often negotiating modifications or filing for bankruptcy, final foreclosure actions are less frequent.

But fewer foreclosures don’t mean fewer families in trouble.