Massachusetts Pre-Foreclosures Decline, But Struggles for Homeowners Remain

It is a cool June morning in Massachusetts, and for some families, the arrival of summer means vacations and backyard barbecues. But for others—those staring down the possibility of losing their homes—this time of year is filled with dread. The numbers paint a declining trend in pre-foreclosures statewide, yet behind the statistics, homeowners are feeling the crushing weight of rising costs and financial hardship.

A Decline in Pre-Foreclosures—But Is It Enough?

In June 2024, 456 homes entered the pre-foreclosure stage across Massachusetts, marking an 18.7% decline from May when 561 homes were at risk. Compared to last June—when 601 homes were in pre-foreclosure—there has been a 24.1% year-over-year decrease. On paper, that might seem like progress, but the broader economic reality suggests that families are still struggling to stay afloat.

“Everyone says the economy is getting better, but for me, it feels like we’re just sinking slower,” says Lisa M., a mother of two from Worcester who fell behind on her mortgage when her husband lost his job last winter. “We’re making partial payments, cutting back on groceries, and picking up extra shifts—just trying to hold on.”

The Economic Squeeze on Homeowners

While pre-foreclosure numbers have trended downward in recent months, financial instability for homeowners has by no means disappeared. Mortgage rates continue their stubborn climb, inflation has made everyday expenses harder to manage, and wages have failed to keep pace with the cost of living in most industries. For many families across Massachusetts, even a small unexpected expense—a medical bill, a car repair—can be the tipping point between stability and serious financial distress.

Pre-foreclosure is often the first red flag that a homeowner is in trouble. It starts when a borrower falls at least 90 days behind on their mortgage and initiates a period when they can either pay, negotiate with the lender, or prepare for potentially losing their home. When homeowners do not find a resolution, pre-foreclosure leads to full foreclosure—the moment when the bank takes ownership of the house and leaves families with nowhere to go.

During the height of the COVID-19 pandemic, federal and state policies kept foreclosures at historic lows. But now, without those protections, reality has set in for many middle-class and low-income homeowners who took on mortgages with razor-thin margins of financial security.

A Look at the Long-Term Trend

Historically, Massachusetts has seen wild swings in foreclosure rates, often mirroring economic booms and busts. In 2012, at the tail end of the Great Recession, more than 25,000 homes faced pre-foreclosure. Then, through the mid-to-late 2010s, numbers steadily declined as the economy grew and unemployment dropped.

Everything changed in 2020. As the pandemic disrupted businesses and incomes, the government intervened with foreclosure moratoriums and mortgage forbearance programs. These protections prevented an immediate housing crisis, pushing pre-foreclosures down to just 1,510 in 2020 and 1,737 in 2021. But in 2022, as these programs faded, foreclosure cases surged to 4,389. By 2023, that number ticked up to 6,302.

Halfway through 2024, pre-foreclosure filings have already reached 3,146, suggesting that while we may not see another crisis like 2008, many homeowners are still struggling to make their mortgage payments in a post-pandemic economy.

Who Is at Risk?

The burden of pre-foreclosure disproportionately impacts low-income homeowners, especially single parents and seniors on fixed incomes. When the economy tightens, wealthier homeowners can often refinance, sell, or access cash through home equity loans. But for families already living paycheck to paycheck, missing even a single payment can snowball into an impossible situation.

For example, James and Maria L., a retired couple from Lowell, lived comfortably for years on their Social Security checks and small pension. But higher grocery bills, utility costs, and property taxes left them with little extra money each month. Then, when Maria had a medical emergency last fall, they were forced to put bills on hold, including their mortgage.

“We thought we were safe,” James explains, shaking his head. “We worked our whole lives, bought our home 30 years ago. And now we’re here, waiting to see if the bank will take it away.”

Where Do We Go from Here?

Despite declining pre-foreclosure numbers, the underlying issues plaguing Massachusetts homeowners remain unchanged. Affordable housing advocates argue that more support is needed to help at-risk borrowers, such as expanded loan modification programs, community grants, and financial counseling services. Others suggest banks should explore more flexible repayment plans before initiating pre-foreclosure proceedings.

For now, homeowners facing potential foreclosure are left to navigate a complex and often unforgiving system on their own. Some will be able to catch up on payments, refinance, or sell before their problems worsen. Others, though, may find themselves part of a statistic—a reminder that even in the best of times, financial security can be precarious.

Lisa M. still hopes her family will find a way out of their financial struggles. “We’re not giving up,” she says. “But it’s scary. Every day, I wonder if this is the day we lose our home.”

For now, Massachusetts’ foreclosure numbers are trending downward, but for families like Lisa’s, the fear remains close to home.