A Growing Shadow Over Rhode Island’s Homeowners: Pre-Foreclosures Signal Quiet Distress

In early September, Lisa H., a 53-year-old single mother from Rhode Island, opened an envelope from her mortgage lender. The letter, plain but weighty, was a notice of default. She was behind on her payments, and unless she found a way to make up for the missed months, her home—where she had raised her two daughters—would soon enter foreclosure.

Lisa is not alone. Across Rhode Island, 55 homeowners found themselves in pre-foreclosure this month, a sign of financial hardship that is increasingly pressing on families throughout the state. While this represents a drop of 20.29% from August’s 69 cases, the bigger picture is unsettling: pre-foreclosures have risen 22.22% since September of last year.

In a state often overlooked in national housing conversations, these numbers suggest that economic pressures—rising costs of living, inflation, and the aftershocks of the pandemic—continue to squeeze homeowners, particularly those living paycheck to paycheck.

A Ticking Clock on Housing Security

Pre-foreclosure is a warning sign, a legal phase that occurs when a homeowner has missed multiple mortgage payments but has not yet lost their home. Some owners in this stage manage to recover, through refinancing or government assistance. Others, however, fall into a downward spiral where the reality of foreclosure becomes inevitable, erasing years of financial stability with it.

The drop in pre-foreclosures from last month may seem like stabilization, but a look at Rhode Island’s recent history reveals a different story. In 2022, only 7 pre-foreclosure cases were recorded in the entire year—close to nonexistent. Then came 2023, with a sharp increase to 899 cases, and now 2024, already tallying 464 pre-foreclosures by September.

This rise indicates a deeper economic unease, something financial experts warn could get worse before it gets better. “We’re seeing more families pushed into housing instability,” said a local housing advocate. “It’s not as dramatic as the 2008 crisis, but for homeowners living on the edge, it’s just as terrifying.”

A Resurgence of Housing Hardship?

To understand the gravity of Rhode Island’s growing pre-foreclosure numbers, it helps to place them in historical context. In 2012, at the height of the last foreclosure crisis, cases soared to 4,380. That number gradually declined over the next decade, plummeting to just seven in 2022—one of the lowest points ever recorded.

But the past two years indicate a reversal: nearly 900 pre-foreclosures in 2023 and now an ongoing surge into 2024. The affordability crisis driving this trend is familiar to anyone trying to buy or hold onto a home: housing prices remain stubbornly high, while mortgage rates strain the budgets of first-time buyers and longtime owners alike.

For homeowners with adjustable-rate mortgages, the situation is especially precarious. “We refinanced when the rates were low in 2020,” Lisa explained. “But now, the payments have increased, and everything—from groceries to gas—costs more. I’m working extra hours, but it’s still not enough.”

Rising Costs, Shrinking Options

For many middle and low income homeowners, falling behind on payments is not a reflection of financial irresponsibility but rather a failure of wages to keep up with inflation. Food costs in Rhode Island have risen more than 20% since 2020, utilities are more expensive, and household incomes have remained relatively flat. This mismatch has pushed families closer to the breaking point.

In particular, Rhode Islanders who faced financial difficulties due to medical expenses, job losses, or unexpected crises are finding fewer options for recovery. Housing assistance programs exist but often have long waitlists. Selling a home under duress isn’t always feasible—especially in areas where rising mortgage rates have cooled buyer demand.

“We thought we’d be okay if we just kept working harder,” Lisa said, her voice a mix of exhaustion and resolve. “But now, we’re just trying to hold on.”

What’s Next for Rhode Island’s Homeowners?

If the trend of rising pre-foreclosures continues, Rhode Island could see a return to foreclosure levels not experienced in over a decade. While state and federal programs exist to assist struggling homeowners, the reality is that many don’t find out about these resources until they are already far along in the foreclosure process.

Financial experts urge homeowners in distress to seek help early, whether through mortgage counseling services, refinancing options, or state-funded relief programs. Additionally, policy changes—such as expanded grant programs for mortgage relief or broader protections against foreclosure—could offer support to those on the brink.

But for families like Lisa’s, every day is a delicate calculation between paying the mortgage and covering other necessities. “I know I’m not the only one in this situation,” she said. “But when it’s your home on the line, it feels very lonely.”

Conclusion: A Slow-Boiling Crisis, Not Yet a Catastrophe

Rhode Island’s current pre-foreclosure rate does not resemble the all-out housing collapse of 2008-2012, but the rising numbers indicate a growing silent crisis—one where financial strain quietly erodes household stability. Month-over-month declines can offer temporary relief, but the overall trajectory suggests that Rhode Island’s homeowners are under increasing pressure.

For those finding themselves in pre-foreclosure, the fight is often personal, grueling, and deeply uncertain. The difference between keeping or losing a home is often a few missed payments away—a reality more Rhode Island families are now confronting.

Unless economic conditions shift, or stronger state-level protections emerge, September’s numbers may not represent the peak—but rather, the beginning of a more prolonged struggle ahead.