New York Pre-Foreclosure Rates Signal Uneven Recovery: Sees Uptick Amid Long-Term Decline

A Slower Decline, a Sudden Rise

In a modest brick duplex on the outskirts of Yonkers, Maria Santiago watches her phone screen light up with messages from her mortgage servicer. Her job at a local warehouse was cut to part-time two months ago. Now, she’s late on her mortgage for the first time since buying the home eight years ago. “I’ve never missed a payment—never,” she says, her voice tight with frustration and anxiety. “But everything just became too expensive, too fast.”

Maria’s story is echoed across New York, where the number of homes entering pre-foreclosure—properties at risk of being repossessed by the bank—rose to 1,393 in September 2024, a 7.82% increase from the month prior (1,292 in August). While still down significantly from a year ago, when pre-foreclosures stood at 2,221, the month-over-month jump suggests a renewed strain on many homeowners just as signs of broader economic recovery remain fragile.

Economic Headwinds Meet Pandemic Aftershocks

The housing market, once buoyed by low interest rates and government protections, is now exposed to the realities of inflation, persistent wage stagnation, and pandemic-era scars. From utility bills to groceries, the cost of living continues to outpace income growth, especially for working-class families and low-wage earners. And higher interest rates—now hovering above 7%—have not only halted homebuying but put adjustable-rate mortgage holders in an especially precarious position.

For many, like Maria, who juggle rising rents, childcare costs, and shrinking hours at work, the burden is too much. “I don’t understand how I’m working more and falling behind faster,” she says. “Everything feels like it’s collapsing at once.”

Her situation is statistically significant. Despite New York’s overall 37.29% year-over-year decrease in pre-foreclosure filings compared to September 2023, the uptick from August to September this year suggests that cracks in the surface remain. For residents like Maria, the numbers may be going down—but the risk of housing insecurity is still very real.

A Long View of Distress in the Housing Market

To understand how we arrived at this moment, it’s useful to look at the data spanning two decades. In 2009—the peak of the foreclosure crisis tied to the Great Recession—New York saw nearly 65,000 pre-foreclosure filings.

Then came the COVID-19 pandemic. With foreclosure moratoriums and stimulus funds, pre-foreclosures plummeted to just 6,397 in 2021—a low few thought possible. But those numbers, now three years in the rearview mirror, have edged upward ever since: first to 19,657 in 2022, then 25,562 in 2023. Through the first nine months of 2024, New York has recorded 13,485 pre-foreclosure filings, suggesting the state is on track to finish the year well below 2023 levels.

But the month-to-month rise this September serves as a warning: while annual indicators suggest improvement, that progress is fragile and uneven.

Behind the Numbers: A Widening Divide

Without access to county- or city-specific data for September 2024, we can’t say exactly where the pressure is greatest. But historically, areas like Suffolk County, the Bronx, and parts of Brooklyn have borne the brunt of housing distress—places with high concentrations of working-class residents, many of whom are people of color and immigrants. These communities have fewer safety nets, little intergenerational wealth, and are more susceptible to job losses during economic downturns.

And so while the broader narrative of housing data may trend downward, it fails to capture the acute pain in these pockets. A drop from over 2,200 pre-foreclosure filings last year to roughly 1,400 this September might read as progress—but for the families represented by these numbers, the experience is one of desperation, not recovery.