Is the Housing Crisis Over in Rural America?

In 2008, the U.S. economy fell off a cliff. Depending on your perspective, it either slipped or was pushed from that precipice by the housing market. In 2009 and 2010, […]

Sign of the Times - Foreclosure

In 2008, the U.S. economy fell off a cliff. Depending on your perspective, it either slipped or was pushed from that precipice by the housing market. In 2009 and 2010, when the crisis was arguably at its worst, the Housing Assistance Council (HAC) began receiving frequent inquiries from the press and others asking, “How is the housing crisis affecting rural America?” We simply had no answer. Mortgage and foreclosure data were virtually nonexistent for most rural areas.

After six years and some hindsight, we are asking some questions ourselves.  Is the crisis over?  And what are the lingering effects? These seemingly basic inquiries still prove challenging, particularly from the rural perspective. So we sought assistance from four affordable housing experts to help answer these questions.

Eric Belsky, until recently the managing director of the Joint Center for Housing Studies at Harvard University, believes that “we have turned a corner in many places,” but that some areas of the country are still struggling to recover from such a significant downturn. Likewise, NeighborWorks® America acting president and CEO Chuck Wehrwein notes that “five or six years ago, the housing crisis that was in the news every day was defined by foreclosures.” He adds that today, the housing crisis is defined by different factors: “One is the lack of affordable rental housing, another is housing affordability, a third is tight lending standards, and a fourth is home values that leave many borrowers underwater.”

Belsky and Wehrwein also agree that most rural areas didn’t see the wild price fluctuations present in several urban and suburban areas during the boom and bust years. However, “there certainly was—and is—a housing crisis in rural areas—although it hasn’t been as well covered by the media,” notes Wehrwein.  Rural renters were also an overlooked segment during the fixation on foreclosures.

National Low Income Housing Coalition president Sheila Crowley states, “Through the housing boom and bust and tepid recovery, the rental housing crisis only has gotten worse. . . . The rental housing shortage has been exacerbated by the foreclosure crisis, as former homeowners moved into the rental market and potential homebuyers stayed in the rental market. An already inadequate affordable rental housing market has had to absorb the growing renter demand.”

One certainty is that we continue to lack quality information and data on rural mortgage performance. “Foreclosure numbers are a consistent moving target. Until we can clearly identify the problem based on reality, solutions will continue to be elusive at best,” says Gail Burks, the president and CEO of the Nevada Fair Housing Center. Ultimately, high quality and accurate data is needed to understand and address the mortgage default and foreclosure crisis. More importantly, a comprehensive understanding of mortgage performance for the entire United States, including rural areas, is essential if we are to return to healthy housing and mortgage markets.  

Many experts, including some of those HAC consulted, believe that the housing markets are improving. Others assert a transition from a mortgage crisis to a more general affordability crisis. At a minimum, we know that hundreds of thousands of rural residents lost their homes to foreclosure or eviction over the past six years. However, it is equally important to remember that far too many rural residents had struggled with housing problems and inadequacies for years, if not decades, before the recent housing crisis hit.

So is the housing crisis over in 2014? Most indicators point to the answer “No.” How the crisis affected rural communities remains an open question. We still don’t have a definitive understanding of housing distress in most rural communities. Housing problems related to the crisis may be delayed or linger in rural communities due to a lack of economic vitality and diversification.

But one thing is certain: rural America needs and deserves better housing market data and information than is currently available.  If anything, the past few years have taught us the importance of housing to our nation’s economy, communities, and families. The outlook is complicated, but investment, involvement, and understanding are crucial to healing our housing markets and ensuring their long-term health while recognizing that all communities, rural and urban, need attention and investment. Maybe we’ll have a better answer in 2020?

The Housing Assistance Council would like to acknowledge and thank Eric Belsky, Gail Burks, Sheila Crowley, and Chuck Wehrwein for their contributions and assistance on this issue. They have full-length feature articles in the July edition of Rural Voices magazine.

(Photo by Jeff Turner, CC-BY.)

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