Colorado’s Pre-Foreclosure Landscape in 2025: Data Shows Decline, But Families Remain on Edge

A Softer Market, but Not for Everyone

In the high desert suburbs east of Denver, 42-year-old Maria Alvarez is packing boxes again. It’s the third time in five years she’s been forced to consider moving — not for a new job or a lifestyle upgrade, but because she’s fallen behind on her mortgage. Rising health care costs and stagnant wages have pushed her into the grips of a pre-foreclosure notice, a legal warning that she now knows by heart.

“I’m not lazy,” Maria says, her voice firm and tired. “I’m working two jobs. But rents are crazy, groceries are crazy, and I just can’t catch up.”

Maria’s story is deeply personal but not unique. Across Colorado, hundreds of families like hers are clinging to their homes as the economy flirts with instability and housing costs float far above what middle- and low-income families can afford. And while the state’s pre-foreclosure numbers in May 2025 show a notable decline from previous months, the data conceals the deeper, systemic fractures many homeowners continue to face.

May 2025 by the Numbers: A Dip in Distress

According to recent statewide figures, there were 281 pre-foreclosure properties in Colorado in May 2025. This number represents a 25.9% decrease from April’s 379 filings and a 10.8% drop compared to May of last year, when 315 properties were listed.

On the surface, this looks like good news — in part, it is. Fewer homeowners entering the pre-foreclosure process suggests some stabilization in the post-pandemic housing market. But these numbers only tell part of the story.

The decline may also reflect a temporary lull driven by seasonal factors or increased refinancing among higher-income households. High interest rates have slowed buying activity statewide, but they have also locked families into unaffordable mortgage adjustments — balloon payments and missed deadlines are still catching people by surprise.

Chronic Instability Beneath Long-Term Trends

To understand what’s really happening in Colorado’s housing market, we need to zoom out.

During the height of the 2008 housing crash, Colorado recorded 44,222 pre-foreclosures in 2007 alone — a staggering peak amid a tidal wave of financial instability. That crisis redefined homeownership for an entire generation.

Since then, pre-foreclosure numbers steadily declined through the mid-2010s. By 2019, filings dropped to just 4,509 across the state. What followed was a pandemic-induced lull, thanks in large part to foreclosure moratoriums and emergency stimulus policies, which left 2021 with only 1,240 reported pre-foreclosures — the lowest in two decades.

Yet that reprieve was always temporary. As pandemic relief programs expired in 2022, pre-foreclosure activity rebounded to 6,855. It has since begun to taper again in the first half of 2025, but not necessarily because families are thriving. Many are simply exiting the market in other ways: selling rapidly with limited equity, turning to rentals, or consolidating with family members in multigenerational homes.

How the Economy Keeps Turning Up the Pressure

Driving these foreclosure pressures are familiar culprits: sluggish wage growth, high inflation, and the growing chasm between income and the cost of shelter. While the Federal Reserve has attempted to cool the housing market by tightening interest rates since 2022, affordability has worsened for low- and middle-income buyers.

In Denver’s exurbs and smaller towns like Pueblo and Grand Junction, residents say they now face a paradox. Mortgage payments might be cheaper than renting, but saving for a down payment has become nearly impossible while groceries and utilities eat up larger portions of household budgets each month.

“I refinanced in 2020 and thought I was secure,” said Kevin Morris, a single father of two living in northern Colorado. “Then property taxes rose, and healthcare premiums doubled. And now I’m behind three payments.”

And for lower-income families, the margin of error is especially thin. A single missed paycheck, an unplanned medical bill, or a car breakdown can set off a chain reaction culminating in a pre-foreclosure notice pinned to the door.