Some 2.3 million American children, or 3% of them, lost their homes during the recession, according to a recent report. An additional 3 million children are at risk of losing their homes as their families fight foreclosure and delinquency. The consequences are far-reaching as many are pushed into homelessness.
Of course, the situation is different between the states, with some having a considerably higher percentage of children affected by the foreclosure crisis. 24/7 Wall St. examined the ten states where the largest percentage of children lost their homes during the recession.
According to the report, published jointly by Brookings and First Focus, more than half the foreclosures occurred in only 10 states. Similarly, more than half the children who lost their homes live in just 10 states, though not all the states are the same. About 1.7 million of the approximately 2.3 million foreclosed homes, as of February 1, 2011, were in just 10 states, and 1.58 million of the 2.33 million children who lost their homes live in only 10 states.
The impact on the children who lost their homes can vary significantly, depending on the state. In several states on this list, including Virginia, Rhode Island and Minnesota, there are a relatively small percentage of homes with families living below the poverty line. In Michigan, Georgia, Florida and Arizona, however, more than 20% of families with children are living below the poverty line. The families who have lost their homes in the poorer states are less likely to be able to afford alternate cheap housing. As a result, children living in these homes will be more affected by foreclosure than children of wealthier families.
One major cause for the high rates of foreclosure in these regions is the substantial decline in home values during the height of the recession, namely from the first quarter of 2006 to 2010. Nine of the 10 states on 24/7 Wall St.’s list are among the 15 states that experienced the largest drops in home prices during this period.
These states also have been hit particularly hard by other aspects of the recession. Seven of the 10 states where the most children lost homes had among the highest unemployment rates in the country in 2011.
In the report, “The Ongoing Impact of Foreclosures on Children,” Brookings examined mortgages in every state that originated during the prerecession 2004 to 2008 period. Of those homes, Brookings calculated the percentage that, as of February 2011, had been foreclosed, as well as the percentage of homes that were either in foreclosure or 60 days or more delinquent on their payments. These numbers do not include rentals. Brookings estimated the number of children affected by these foreclosures based on population data from the U.S. census bureau. Based on Brookings’ report and census data, we calculated the percentage of each state’s children that were affected directly by completed foreclosures. 24/7 Wall St. also looked at additional data, including unemployment rates, poverty, poverty rates for families with children and home price declines.