Tennessee’s Pre-Foreclosure Crisis in 2025: A Slow Burn for Struggling Homeowners

The Uneasy Calm Behind May’s Decline

On paper, the housing crisis in Tennessee appeared to take a momentary breath in May 2025. After April’s surge of 424 pre-foreclosures, May saw a marked drop to 347 properties entering the early stages of distress—a monthly decline of 18.2%. But for the many Tennesseans living paycheck to paycheck, this reprieve does not reflect improvement. Rather, it is part of a larger trend of financial strain that continues to ripple across the state’s housing market.

Compared to this time last year, pre-foreclosure filings in Tennessee are slightly up—by 1.8%—from 341 in May 2024. It’s a modest year-over-year increase, but one that foreshadows a persistent challenge: rising housing costs, stagnant wages, and inflationary pressures are digging deeper into the pockets of working-class families. And data from early 2025 hints that this may be more than a seasonal fluctuation.

A Rising Tide After Years of Calm

To understand Tennessee’s current pre-foreclosure landscape, it’s necessary to examine where it has come from. The 2008 financial crisis and subsequent housing collapse hit Tennessee hard. In 2009, the state saw more than 24,000 homes enter pre-foreclosure—a historic peak that coincided with the national economic meltdown.

What followed was a slow but steady recovery. By 2017, pre-foreclosures across Tennessee had dropped to 391. The bottom came in 2018 with just 138 cases. But the calm didn’t last. After the pandemic jolted housing markets in 2020, filings spiked again, culminating in 5,840 cases in 2023.

Now, just five months into 2025, Tennessee has already recorded 1,067 pre-foreclosure filings. While it’s not 2009 all over again, the upward trajectory since 2023 suggests a pattern that no longer looks like recovery, but regression.

The Human Side of the Data

Behind each of the 347 pre-foreclosures in May lies a home at risk and a family on edge. For people like Angela Sims, a single mother in eastern Tennessee who lost her job in early February, the stress mounted quickly. “I was only out of work for three weeks,” she said, “but that was enough to throw everything off.” Her mortgage was already a stretch before prices of food and gas went up. “Now the bank’s calling, and I’m trying to explain every week why I can’t catch up.”

People like Angela aren’t alone. Across Tennessee, residents who were once considered economically stable are now on precarious footing. Inflation remains stubbornly high, and interest rates—while no longer climbing—still make refinancing a mortgage nearly impossible for those who bought at lower rates. Renters, too, are feeling the squeeze, which in turn drives up home prices and pushes families into homeownership prematurely and under unmanageable terms.

The Disappearance of the Middle Ground

What makes Tennessee’s situation unique is its economic contrast. While the state has attracted new businesses and seen a population influx stemming from urban flight in places like California and New York, wage growth hasn’t kept pace with housing demand. In places like Nashville and Chattanooga, property values have surged while the average household income has stayed relatively stagnant. This has led to a housing environment that leaves little room for financial error.

Many of the current pre-foreclosures appear to come from modest, often suburban homes—properties that once symbolized the American Dream but are now slipping beyond reach. While there is no county-level data available for May 2025, anecdotal evidence suggests higher concentrations in metropolitan suburbs, where lower-income buyers were drawn during the housing boom of 2021–2022, only to face ballooning mortgage payments as pandemic-era assistance programs expired.

Conclusion: A Call for Awareness and Action

The May 2025 pre-foreclosure count in Tennessee stands as both a statistical note and a moral signal. A decrease from April’s high is welcome, but only if it leads to real change and accessibility. As housing affordability continues to deteriorate and economic uncertainties persist, Tennessee’s most vulnerable homeowners are at risk of becoming invisible casualties.

Angela, like many others, waits quietly for a resolution. “I’m still hoping for a second job,” she says. “Maybe if I get one soon enough, I can stop the spiral.” For now, the state watches the numbers trickle in, while families like hers hang in the balance.