Friday, February 20, 2009

Home foreclosure not a national problem

I was very surprised to learn from Michael Barone that half of the nation's home foreclosures are in four states - Nevada, California, Arizona and Florida. Furthermore, only 9 states total have foreclosure rates above the national average.

What do they have in common?

"All but California have had massive population growth in the 1990s and the 2000s; all have large Hispanic populations; all have been the site of much housing speculation."

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At 2/23/2009 3:46 PM, Anonymous Anonymous said...

only 9 states total have foreclosure rates above the national average.

I assume that "national average" is the new increased national average, and not a national average figured from before this crisis?

I'm not sure what your point is.

At 2/24/2009 11:18 PM, Blogger Gary Collard said...

The point is that home foreclosure is not a national problem, it is heavily concentrated in a relatively small number of states.

Thus looking at those states to see what differentiates their housing markets, demographics, etc from national norms (or, especially, from states with low foreclosure rates) should reveal clues as to what is driving foreclosure.

Government intervening in housing markets over the last three decades is self-evidently the big picture problem that created the whole thing, but that is mostly federal and can't tell us why we have such high levels of concentration in certain areas. Surely there are some lessons to avoid in the future to be found in those areas, as well as the no-brainer of keeping government from pushing home ownership.

Social engineering schemes have a record of failure that would make the LA Clippers blush.


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