Illinois Pre-Foreclosure Rates Fall in 2025—but Many Homeowners Still on the Brink

A Worrying Calm in the Eye of a Storm

In May 2025, pre-foreclosure filings in Illinois fell to 1,316, a sharp 28.26% decrease from just one month prior and 28.03% lower than the total in May 2024. At face value, these numbers might suggest the state is experiencing a reprieve from its longstanding housing crisis. But the reality on the ground paints a more complex—and more human—picture.

Illinois, like much of the country, is witnessing a slowdown in recorded pre-foreclosures. Yet, buried underneath the declining filings is a quieter storm of financial hardship, one that continues to tighten its grip on working-class families, renters turned buyers, and those already straining under the weight of inflationary pressures and elevated mortgage rates.

“We’re technically not in foreclosure yet,” said Maria Alvarez, a 43-year-old childcare provider from Aurora. “But we’re definitely not okay.” Maria and her husband purchased their two-bedroom ranch-style home in 2021, just months after pandemic-era relief programs expired. Now, following a rise in property taxes and a recent drop in income after her husband’s construction job dried up, they are three months behind on their mortgage. “This is our dream home—but it feels like a bad dream lately.”

A Declining Trend With a Complicated Backdrop

The May 2025 numbers mark the lowest monthly total for Illinois this year. The decreasing trend began earlier in 2024 and has continued into 2025. From January through May of this year, Illinois has recorded 8,864 pre-foreclosure filings—compared to 24,492 during the same period in 2024. That represents a year-to-date drop of more than 63%.

It’s a significant decline, especially when set against the state’s pre-foreclosure peak in 2010 when 183,270 Illinois households received initial foreclosure notices. Since that apex, filings have trended downward, bottoming out during the COVID-19 pandemic, when a federal foreclosure moratorium kept many vulnerable homeowners afloat.

Yet this latest decline may not be the result of improved financial stability among homeowners. Instead, it may be reflecting new bottlenecks in the foreclosure process itself, including the backlog in court proceedings, administrative delays with mortgage servicers, and a shift in how distressed homeowners manage arrears.

“It’s not that people aren’t struggling—it’s that the system is taking longer to recognize it,” said Jason Miller, a housing advocacy attorney based in Chicago’s West Side. “We’re seeing more people in pre-pre-foreclosure—behind on payments, avoiding phone calls, taking out payday loans to delay the inevitable.”

The Lingering Toll of Affordability

Housing affordability in Illinois remains a persistent barrier. Property prices have leveled off across much of the state, but homeowners continue to face the weight of rising insurance premiums, utility costs, and groceries, all of which have climbed sharply since 2022.

“Inflation doesn’t just affect gas and eggs—it hits your ability to pay your mortgage,” Miller said. For families already living paycheck to paycheck, one missed payment can become two. Two missed payments can spiral into fear, financial triage, and eventually, a pre-foreclosure filing.

Even as the statewide numbers trend downward, the scar tissue left by two decades of volatility in the housing market remains. The economic and psychological toll on homeowners—particularly in lower-income neighborhoods—can take years to heal, even if foreclosure is ultimately avoided.

Measuring Pain Behind the Numbers

To understand the lived experience behind the data, you have to look beyond the foreclosure filing itself.

In 2005, Illinois had just over 21,000 pre-foreclosure filings. That figure exploded in the following years, reaching nearly 184,000 in 2010 as the subprime mortgage crisis left neighborhoods gutted. While progress has undeniably been made since then—2023 ended with just 56,586 filings—the path to housing security has not been evenly paved.

Black and Latino homeowners are still more likely to fall behind on their mortgage payments than white ones, due in part to wealth gaps, discriminatory lending practices, and income volatility in the gig economy. “It’s hard to grow generational wealth when you’re always on the brink of losing your home,” said Tiffany Johnson, a housing counselor based in Joliet.

Maria Alvarez’s family is still waiting to hear back from their lender about a loan modification. “They sent us a packet of forms, and then it went quiet,” she said. In the meantime, she’s begun working on weekends at a local bakery to try and make up the gap in income. “We’re doing everything right. And still—it feels like we’re always behind.”

Conclusion: The Numbers Go Down, But the Stress Remains

Illinois may be experiencing a slowdown in pre-foreclosure filings, but that doesn’t mean the housing crisis is over. For many families, this is just a lull—a pause before the pendulum swings again.

Behind each line in the monthly foreclosure dataset is a person, a child, a memory made in a kitchen or backyard that’s one mortgage payment away from disappearing.

And though the May 2025 numbers will be read as a hopeful sign by policymakers and banks, for thousands of struggling homeowners across Illinois, they reflect only a partial truth.

Because the math may be changing. But the pain? That remains.