Rhode Island’s Pre-Foreclosure Rates Reveal a Growing Housing Strain

A Snapshot of a Housing System Under Stress

In September 2024, Rhode Island saw 55 homeowners enter pre-foreclosure. Behind that simple number lies a growing anxiety taking hold of working-class families who are seeing their dreams eroded by rising prices and stagnant wages. While this figure marks a 20.3% decline from August, when 69 homes were in pre-foreclosure, it also reflects a troubling 22.2% increase compared to September of last year, a signal that more Rhode Islanders are living on the edge of financial collapse.

That monthly dip may offer a brief moment of hope, but the year-over-year rise suggests a more troubling pattern: inflation, unemployment, and a lack of affordable housing are pulling at the seams of the state’s most vulnerable homeowners.

A Closer Look at the Numbers: Pre-Foreclosures in September 2024

In much of the United States, the housing market has become less of a source of long-term stability and more of a precarious investment in survival. Rhode Island is no exception. The 55 pre-foreclosures filed in September may seem modest compared to the crisis years of 2008 or 2012 when filings numbered in the thousands, but the climb from 45 pre-foreclosures in the same month last year reflects mounting pressure.

It’s the kind of pressure felt by residents like Carmen Rodriguez, a 43-year-old mother of three in Pawtucket. Carmen purchased her modest two-bedroom home in 2015, back when interest rates were low and Rhode Island was still shaking off the dust of the last housing crisis. “I thought we were finally safe,” she said. But after losing her job at a fulfillment center last December, the mortgage payments quickly became a monthly gamble.

“My husband picks up overtime, but it’s not enough,” she said. “Every month we have to choose: do we pay the mortgage? Or the car? Or the heat?”

The Weight of History: Rhode Island’s Foreclosure Trends

To understand today’s data, you have to look backward. Rhode Island saw its highest levels of pre-foreclosure filings during the national housing collapse in the late 2000s: 3,446 in 2008 and 4,296 in 2012. Two years that bookended the darkest period of America’s housing market.

From 2015 through 2021, data is scarce, likely a mix of reporting lapses and federal interventions such as foreclosure moratoriums during the pandemic. But what we can see is telling. Rhode Island recorded just 7 pre-foreclosure in 2022, a number so low it practically disappears on a graph. Yet just a year later, the state saw that number rocket up to 874. So far in 2024, with just nine months on the books, the total stands at 474.

Although this trajectory doesn’t approach the financial devastation of the Great Recession, it warrants close scrutiny, especially since the burden is falling hardest on those with the fewest resources to adapt.

The Struggles Behind the Statistics

Pre-foreclosure is more than a legal status: it is an emotional limbo that leaves homeowners clinging to hope through a fog of dread. It typically begins when a homeowner falls behind on their mortgage payments, triggering a notice of default from their lender. At this stage, the homeowner still owns the home, but unless they catch up on missed payments or negotiate a reprieve, foreclosure becomes almost certain.

The months leading to that point are often marked by the same refrain: a job lost here, a medical bill there, and a sudden spike in food or fuel prices that derails a precariously balanced budget.

Take the case of Danny and Michelle Pelletier. The couple, both school aides in Warwick, had always lived modestly. But rising mortgage rates in early 2023 and a spike in property taxes meant their once-affordable monthly payments became $400 more than what they had budgeted. “We couldn’t refinance; our credit took a hit during COVID,” Michelle said, tears welling. “We just don’t make enough to absorb that kind of increase.”

Their home entered pre-foreclosure in June. They’re now exploring loss mitigation programs, but the clock is ticking.

Final Thoughts

Rhode Island may no longer be in the throes of a historic foreclosure crisis, but the uptick in pre-foreclosures reveals deeper fissures in the housing market and broader economy. The steady climb since 2022 indicates that without meaningful relief efforts and affordable housing solutions, the state edges closer to a familiar pattern, one where too many working families see their homes slip away one payment at a time.

As the leaves turn and the colder months set in, the real test lies ahead. Will the state’s most vulnerable homeowners find the relief they need? Or will we look back on 2024 as the year the pre-foreclosure tide began to rise once again?

Because behind every 55 notices this month is a Rhode Islander trying not to fall through the cracks.