Vermont Pre-Foreclosures Show Sharp Year-Over-Year Increase Amid Rising Economic Pressures

A Growing Strain on the Green Mountain State’s Most Vulnerable Homeowners

In Vermont, where rolling hills and tight-knit communities have long fostered an image of stability, housing insecurity rarely takes center stage. But a quiet shift is beginning to take root, one measured not by headlines but by a small, yet significant number of families slipping into pre-foreclosure.

In September 2024, Vermont recorded six properties in pre-foreclosure, a modest figure compared to many states but one that carries outsized weight in a state with limited housing inventory. Though this number represents a 14.29% decrease from August, when there were seven pre-foreclosures, year-over-year figures tell a grittier story: the total marks a staggering 500% increase from just one property in September 2023.

Behind the Numbers: A State Under Pressure

To understand what’s unfolding in Vermont’s housing market, it’s necessary to look beyond the raw data and examine the broader socioeconomic pressures pinching the state’s most vulnerable residents.

Over the past two years, the inflation-fueled rise in cost-of-living expenses, pairing high utility bills, food prices, and healthcare costs with rising interest rates has left many families struggling to keep up with mortgage payments. While job growth has returned to pre-pandemic levels in some sectors, wages have not kept pace with inflation for many working-class Vermonters, particularly those in service, retail, and agricultural employment.

Valerie, a 61-year-old retiree in central Vermont, worked in childcare for three decades before a chronic illness forced her into early retirement. She now lives on a fixed income and says the rising cost of essentials has pushed her dangerously close to default on her mortgage.

“I paid my house off once, but then I refinanced to help my daughter pay for her schooling,” she explains. “Now the mortgage company is saying I missed a payment, but it’s just that I couldn’t afford both food and the bill. I’ve never been late in my life until now.”

Valerie is not alone. Many Vermont homeowners are finding themselves forced into impossible trade-offs, and as a result, the number of pre-foreclosure filings, a legal marker that a homeowner is behind on mortgage payments but has not yet lost the home, has begun to creep upward after years of stability.

A Look at the Long-Term Trends

Historic data reveals that Vermont has seen sharp but episodic spikes in pre-foreclosure activity. The state’s highest annual totals came in 2013 and 2019, with 112 pre-foreclosure filings each year, periods that coincided with broader national economic uncertainty and slowed wage growth. In both years, Vermont’s housing market absorbed those disruptions relatively quickly.

But since 2023, there have been signs of a more systemic strain. Vermont recorded 73 pre-foreclosures in 2023, more than double the total of the previous year, and 2024 is on track to meet or surpass that figure, with 70 reported through the end of September.

Compared to 2021, which recorded only 39, and 2020, which had just 27, the recent rise reflects a deeper imbalance between household incomes and housing costs. Though Vermont has largely avoided the rapid price increases seen in larger housing markets, its stock of affordable housing has continued to shrink, a critical pressure point in a state where the median income lags far behind national averages.

The Numbers Are Small—But Significant

At first glance, six pre-foreclosure filings in a month may seem like a statistical fluke. After all, Vermont is home to just over 250,000 owner-occupied housing units. But the scale of the crisis isn’t defined solely by numbers, it’s the concentration, the places these filings occur, and the lives that hang in the balance.

Unfortunately, detailed data broken down by counties or cities wasn’t available for September 2024. But earlier years hint at a trend: pre-foreclosures often concentrate in Vermont’s most economically constrained areas, regions with higher unemployment, older housing stock, and fewer resources for at-risk homeowners. These filings aren’t just forecasts of foreclosure. They can often be the beginning of a cascading set of losses: jobs, health, stability.

“I don’t want to leave this house,” says James, a 47-year-old home healthcare worker in southern Vermont. He and his wife fell behind when their heating bill jumped 40% during last winter’s cold snap. Despite their best efforts to catch up, the lag spilled over into missed mortgage payments. “It’s where my kids grew up, where we built our life. I’m not looking for a handout, maybe just a little more time.”

Conclusion: A Delicate Warning Sign

Pre-foreclosure rates may not dominate headlines the way eviction crises or housing booms do. But they offer a critical early warning, underscoring which families are beginning to fall behind before they lose everything.

In Vermont, the data is telling a story of growing fragility in a market once considered immune to the volatility of bigger states. The numbers remain small, but for the families behind each filing, the stakes are immeasurably large.

As Vermont enters the fall season, a time when heating bills climb and seasonal employment wanes, the state may find that six pre-foreclosure filings in a month are less an anomaly and more a prelude to the challenges still to come.