Wisconsin’s Pre-Foreclosure Spike in September: A Hidden Struggle Beneath the Surface

A Sudden Surge Masks a Long-Term Decline

In Wisconsin, a state that once teetered on the edge of housing collapse during the foreclosure crisis of the late 2000s, pre-foreclosure activity is quietly ticking upward again. Not enough to resurrect past nightmares, but just enough to remind us that those scars still linger in people’s daily lives.

In September 2024, 236 pre-foreclosure properties were recorded across the state. A surprising and sharp increase of nearly 70% compared to August’s total of 139. While this month-over-month jump raises alarm bells, the broader view tells a more measured story: compared to the same period last year, September’s number is actually down by 20.3%.

This duality, a short-term spike amid a long-term decline, reflects the unpredictable strain of economic forces bearing down on homeowners, particularly in lower-income communities.

A History of Recovery — With New Cracks Emerging

Wisconsin’s housing landscape has undergone a dramatic transformation over the past two decades. In 2012, the state saw more than 41,000 pre-foreclosure filings, remnants of the Great Recession still plaguing Midwest households. Since then, the numbers have dropped steadily, down to 3,183 in 2023, and just 1,256 filings in the first nine months of 2024.

By historical standards, these figures are low. But for those living on the margins, workers juggling multiple jobs, retirees on fixed incomes, single parents paying inflated childcare costs, even these new numbers feel overwhelming.

Behind the Numbers: When Inflation Meets Housing Insecurity

To understand why Wisconsin’s pre-foreclosure rate increased so dramatically between August and September, one must look beyond spreadsheets. What lies beneath is a grinding confluence of inflation, stubbornly high interest rates, and wage stagnation that continues to pinch household budgets.

Rebecca, a single mother of two living in Racine, found her budget unraveling after her childcare subsidy ran out in June. An unexpected medical bill quickly followed, and by late August, she was already behind on her mortgage. “I never thought I’d be here,” she said, standing outside the suburban ranch she’s owned for six years. “I work full-time, sometimes overtime. But everything just keeps getting more expensive. The groceries. The gas. The daycare. I feel like I just can’t keep up anymore.”

Rebecca’s story is not unique. Across the state, many residents face the same quiet erosion of financial stability. Inflation may have cooled from its pandemic-era highs, but the lingering effects combined with higher household debt and rising insurance premiums are undermining the slow recovery for vulnerable families.

Mortgage Moratoriums Are Gone — But Vulnerabilities Remain

The dramatic drop in pre-foreclosures during 2020 was largely artificial. Federal and state moratoriums enacted during the COVID-19 crisis spared thousands of homeowners from foreclosure, but they still accumulated debt.

Once those protections ended in late 2021 and early 2022, we began to see a small, slow rebound in pre-foreclosure activity. That uptick continues into 2024, although the cumulative yearly total remains far below pre-pandemic levels.

Yet the modest totals obscure what experts call a “localized distress”: pockets of high-risk borrowers, often in lower-income or rural areas, experiencing disproportionate hardship.

“I see families every week who are just one unexpected expense away from losing everything,” said Marisol Jiménez, a housing counselor at Milwaukee’s Urban Empowerment Network. “The foreclosure machine isn’t running at full speed like it was in 2010. But for the people in it, it doesn’t matter. It still feels like everything they built is slipping away.”

Conclusion: Looking Beyond the Statistics

The September spike in Wisconsin’s pre-foreclosures might not yet signal a new housing crisis. But it does reveal a deeper, human crisis. One where families are working more hours for less buying power, where decades of sluggish wage growth and systemic affordability issues are colliding with rising bills and vanishing safety nets.

This is not the housing collapse of 2008. It is quieter, more granular, and perhaps more insidious. Because for the Rebecca’s of the world, those caught in the middle of all the charts and checklists, a foreclosure filing is not a data point. It’s a threat to everything they’ve worked to build.

And while the numbers in Wisconsin may show a long-term decline in pre-foreclosure, the people living at the edge don’t need a history lesson. They need help.