The Silent Crisis: Connecticut’s Pre-Foreclosure Rate Drops, But the Struggle Is Far From Over

John and Lisa Carter never thought they’d be here—stacking unopened bills on the kitchen counter of their modest Norwich home, dodging collector calls, and rationing gas for grocery runs.

Three years ago, the couple was doing fine. John, a machinist, and Lisa, a part-time school administrator, had saved enough to own a home in a neighborhood with tree-lined streets, close to their children’s elementary school. “We were building something,” Lisa says, voice tight with frustration. “Now, it feels like we’re fighting a system that wants us to fail.”

The Carters’ story isn’t unique. Across Connecticut, families are finding themselves teetering on the edge. Pre-foreclosure—an early warning sign indicating that homeowners have fallen behind on mortgage payments but before a lender officially claims the home—is both a technical designation and a quiet catastrophe playing out behind closed doors.

In June 2024, Connecticut reported 391 pre-foreclosures, marking a 2.49% decline from May 2024’s 401 cases. Compared to the same time last year, the drop is more drastic—a 19.38% decrease from June 2023’s 485 cases. On paper, this suggests improvement. However, for those living through it, the numbers mask a more insidious problem: the rising cost of simply staying afloat.

A Market in Flux

Pre-foreclosure rates don’t just measure delinquent mortgages; they map economic stress. Traditionally, pre-foreclosures mirror broader financial disruptions like job losses, inflation, or medical emergencies that leave households unable to keep up with payments. The fact that Connecticut’s numbers are dropping could mean people are stabilizing. It could just as easily mean they’ve already lost their homes.

A wider look at pre-foreclosure trends shows a state in recovery—Connecticut saw 18,182 pre-foreclosures in 2013, a stark reminder of the 2008 housing crisis ripples. Over the years, government interventions, loan modifications, and rising home values gave homeowners more breathing room. By 2021, pre-foreclosures had fallen to a record low of 1,004, but by 2023, they climbed to 5,017, a sign that new pressures were emerging.

In 2024, the mid-year total stands at 2,456, suggesting a downward trajectory but not necessarily a solution.

Behind the Numbers: The Struggles of Connecticut Homeowners

For households facing foreclosure, the past two years have been relentless. Budget-tightening measures that worked during the pandemic—cutting cable, skipping vacations—aren’t enough to offset surging property taxes, insurance premiums, and everyday costs.

“A year ago, I was dipping into savings to cover the mortgage,” says Mark Wilson, a 54-year-old truck driver from Bridgeport. “Now, the savings are gone.”

Mark points to inflation as the slow burn that tipped his family into financial distress. The rising costs of groceries, gas, and utilities meant that even a temporary job gap became catastrophic. “Once you miss one payment, it’s like trying to climb out of a hole that gets deeper by the day,” he adds.

Even homeowners trying to sell before foreclosure claim their property find themselves in trouble. “Buyers are hesitant,” says Maria Lopez, a real estate agent in Stamford. “Rates are high, and unless the house is move-in ready, offers are scarce.” Her clients, many of whom are selling under financial duress, often get lowball offers that don’t cover their mortgage debt.

A False Sense of Security?

With a 2.49% month-over-month decrease and a 19.38% year-over-year drop, an optimistic reading would suggest a stabilizing market. But experts warn against assuming Connecticut homeowners are out of the woods.

“Lenders are getting more aggressive about foreclosing,” says Tamara Nguyen, a housing counselor in Hartford. Banks, she explains, offer fewer extensions and loan modifications than they did in the immediate wake of COVID-19. “In 2020, lenders were willing to negotiate—now they just want their money back.”

Meanwhile, rising rents have left people with fewer safety nets. Homeowners who miss mortgage payments used to have the option of selling their property and downsizing to a rental. However, in Connecticut, where rental prices have risen nearly 20% since 2020, moving isn’t always an option. “Some families are choosing between keeping a mortgage that’s drowning them or paying rent that’s just as high,” Nguyen explains.

For homeowners like the Carters, these choices have no good endings. “Every time we think we’re catching up, something else hits—car repairs, school fees, a power bill that’s higher than we expected,” says Lisa. Their lender has warned them they’re now in pre-foreclosure, and if they don’t make up the missed payments in the next four months, their house goes to auction.

“I just keep wondering—where do we go from here?”

The Fight to Keep Homes

Community organizers are pushing for more intervention, urging lawmakers to expand mortgage assistance programs and foreclosure mediation efforts. “Too many homeowners are slipping through the cracks,” says Sarah Hawkins, a policy analyst at the Connecticut Housing Advocacy Group. She believes the recent drop in pre-foreclosure cases might reflect homeowners selling before foreclosure rather than actually avoiding financial collapse.

“If we want to truly improve these numbers, we need policies that prevent families from having to choose between food, medicine, and their housing,” she argues.

In the meantime, for homeowners who’ve fallen behind, every decision is weighted with urgency. Do they borrow from relatives? Try to refinance, even with poor credit? Gamble on a settlement with their lender?

As the Carters contemplate their next steps, they aren’t thinking about percentages. They’re thinking about their children, their community, and whether they’ll be able to celebrate Christmas in the house they once thought they’d grow old in.

Because in the end, pre-foreclosure isn’t a statistic. It’s a story—one that thousands in Connecticut know far too well.