New York Pre-Foreclosures Drop 30%, But Homeowners Still Struggle

Surging Costs and Silent Struggles: The Story Behind New York’s Pre-Foreclosure Decline in 2025

A Data-Driven Look at the Human Cost Behind New York’s Housing Instability

In the Bronx, Juan Martínez worries a little more each day. A former rideshare driver who left work six months ago to care for his ailing mother, he’s now three months behind on mortgage payments. “It’s hard to explain,” he says, sitting on a milk crate in front of the three-story brownstone he purchased in 2016. “Everything costs more—food, gas, medicine—and the mortgage bill never changes.”

For homeowners like Juan, the numbers may suggest some temporary relief—yet life doesn’t feel any easier. According to the latest housing data, pre-foreclosure filings across the state of New York dropped by nearly 30% in May 2025 compared to both the prior month and the same time last year. Despite that, the root causes of housing instability—rising costs of living, patchy employment, and vanishing affordability—are still ravaging vulnerable communities.

Who’s Actually at Risk?

This sharp decline in recorded pre-foreclosures is not necessarily evidence of improved housing stability. Far from it. Pre-foreclosure filings are only one stage in the loss of homeownership, and many distressed homeowners never show up in the official counts at all.

For every case formally recorded, there is another that ends in a quiet desperation—families who vacate their homes rather than face the courts, those who strike informal deals with landlords, or those living without heat or utilities while skipping meals to scrape together a partial mortgage payment.

Housing counselors in Long Island and Westchester repeatedly stress the invisible weight placed on lower-income homeowners, many of whom bought during the tail end of historically low interest rates and now face ballooning property taxes, inflationary pressure, and job insecurity.

“People assume that because mortgage delinquency is down, people are okay. They’re not,” says Maya Franklin, a housing advocate in Queens. “They’re in survival mode.”

The Affordability Crisis Beneath the Surface

Across New York, a bigger problem is simmering beneath the foreclosure stats: affordability. Median home prices have risen faster than wages, particularly in suburban hubs and commuter towns where remote work drove up demand in 2021 and 2022. Meanwhile, inflation continues to erode purchasing power, and borrowing remains painful after multiple interest rate hikes from the Federal Reserve.

In response, many New Yorkers stretched their budgets to the breaking point just to buy. Now, even those with fixed mortgage rates find themselves behind on everything else—from utilities and insurance to student loans and credit card debt. And when an emergency strikes—a health scare, job loss, or sudden rent hike—homeownership starts to look more like a liability than an asset.

For immigrant families, especially those with mixed-status households, the stress is compounded. Limited access to formal relief programs and language barriers often mean they’re the last to benefit and the first to fall behind.