Areas With High Immigration Dominate Foreclosed Home Listing
The Pew Hispanic Center has released the report “Through boom and bust: Minorities, immigrants and homeowner,” showing the correlation between an area’s high number of properties in foreclosed home listing and large immigrant populations.
In its report, Pew Historic Center noted that there is a linked between high foreclosure activity and immigrant populations in counties. The report ranked Clark County in Nevada as sixth among the areas in the country with high foreclosure rates in 2008. The county registered 8.9 percent foreclosures and one in every 4 members of the household was foreign-born.
According to the report, the numbers were higher than the nationwide figures and 4.7 percent of these immigrants were Hispanic.
However, one of the study’s author, Rakesh Kochhar said that foreclosure and immigration may appear to be related but the association is not conclusive. He explained that job opportunities in the house construction industry in previous years have attracted many immigrants to move to the Las Vegas Valley. And some of those workers acquired properties in the area.
Furthermore, the report claimed that blacks, Hispanics and other minorities took out subprime mortgage loans with high interest. Other studies reported that immigrants were targeted by most lenders during the peak of the real estate market.
Nationwide data showed that about 27.6 percent of mortgage loans to Hispanics and a third of loans taken out by blacks in 2007 were high priced. Meanwhile, one out of 10 loans issued to whites carry high rates. As such, areas with large population of minorities have also high numbers of homeowners whose properties are at risk of being placed on foreclosed home listing.
According to Kochhar, counties with high immigrant populations and foreclosure rates also share similar characteristics, including declining home values and rising unemployment rates.
The unemployment rate at Clark County increased by 10.4 percent in March, the 10th-highest among metropolitan areas in the country. Clark County’s total unemployment rate was 6.5 percent last year. And hardest hit by job loss was the construction sector.
Meanwhile, a Standard and Poor’s report noted that home market values in Las Vegas declined by 31.7 percent last year. Commenting on the study’s results, Kochhar said that the presence of large immigrant populations in a county may indicate the effects of the rise and fall cycle which contributed to the increase in the number of properties on foreclosed home listing.
