Virginia’s Pre-Foreclosure Landscape: A Cautious Resurgence Amid Economic Strain

A State of Unease: 504 Pre-Foreclosures Filed in September

In September 2024, Virginia recorded 504 pre-foreclosure filings. A figure that, while seemingly modest compared to historical highs, represents a subtle but meaningful shift in the housing market. This is a 2.86% increase over August’s total of 490, but more notably, a 28.41% drop from September 2023, which saw 704 properties enter the early stages of foreclosure.

Taken alone, these numbers might suggest a stabilizing market. But behind each data point is a person, a family, a front porch gathering dust under the weight of missed mortgage payments. And when set against longer historical trends and the current economic backdrop, from rising inflation to stagnant wages, Virginia’s housing recovery begins to look more uneven, more precarious.

Looking at the Long Arc: A Decade of Drift

To understand how we arrived at this moment, it’s worth glancing back. Virginia’s pre-foreclosure numbers peaked dramatically in 2010, with over 55,000 filings recorded during the height of the housing crisis. In the years that followed, the state slowly descended from that peak, eventually reaching a near standstill in 2021 and 2022, when only 27 and 13 pre-foreclosure filings occurred statewide, respectively.

Those record-low numbers weren’t the result of a sudden economic miracle. Pandemic-era foreclosure moratoriums, federal relief, and forbearance programs held the market in suspension, masking problems rather than resolving them. As those safeguards expired, the market began to stir once again, and with it came the return of familiar vulnerabilities.

By 2023, Virginia logged 8,238 pre-foreclosure filings, a dramatic resurgence signifying more than just statistical noise. And with 4,430 filings already on record through September 2024, the state may finish this year just shy of last year’s total. Viewed from a decade-long perspective, however, current numbers remain relatively low, although the direction of change matters more than where we are.

Low Numbers, High Risk: What the Data Doesn’t Show

The dataset tells us many things, but not who these Virginians are, or what they’ve endured to keep their homes. There’s no county breakdown, no urban vs. rural divide, no names attached to the growing list of pre-foreclosures. We don’t see the mother in Henrico juggling two jobs to outpace her mortgage bill. We don’t hear the retired couple in Norfolk quietly rationing medication to meet rising utility costs.

Each of the 504 properties in pre-foreclosure this month represents a fork in the road. For some, it will be a negotiated resolution with the lender. For others, it could be the first step toward eviction, homelessness, or a damaging credit spiral that can take years to recover from. National headlines declare a resilient economy, but those living paycheck to paycheck often find that resilience doesn’t trickle down.

The Affordability Crisis Still Looms

While the national housing market has cooled from its pandemic-era frenzy, affordability continues to be an unrelenting obstacle, particularly for low-income homeowners. Interest rates have risen, intended to curb inflation but with the side effect of pushing monthly mortgage payments higher, the average 30-year fixed mortgage rate hovered around 7% for much of 2024.

Meanwhile, household income has failed to keep pace with rising costs for essentials like groceries, transportation, and healthcare. For many families, there’s little left over each month. When a medical bill arrives or a car breaks down, it doesn’t just strain the family budget, it can derail it completely.

A Virginia mother of two, who asked not to be named due to ongoing legal proceedings, said she was three months behind on mortgage payments. After losing her job at a local retailer during a round of layoffs, she pieced together jobs on delivery apps but hasn’t been able to stabilize. “I didn’t think it would happen to me,” she said. “It was just one thing after another. Now I’m scared to check my mail.”