Many analysts are saying that the first wave of forclosure homes for sale were the results of high-rate high-risk subprime lending and the second wave of foreclosures are being caused by rising unemployment rates.
But if one digs more deeply into data provided by California-based foreclosure tracking firm RealtyTrac on foreclosure filings and forclosure homes for sale in April, one can conclude that the correlation between joblessness and foreclosure homes for sale is not very significant.
The three states with the biggest jobless rates are not the three states with the biggest number of foreclosure notices, foreclosure rates or foreclosure homes for sale.
RealtyTrac reported that the four states with the biggest foreclosure rates are still California, Florida, Nevada and Arizona, accounting for 57 percent of total foreclosure filings nationwide or 193,659 of the total 342,038 filings recorded.
Meanwhile, the top states in terms of jobless rates are Michigan, Oregon, South Carolina, California, North Carolina, Nevada and Rhode Island.
The three states with the biggest jobless rates – Michigan, Oregon and South Carolina – are not in the top ten states in foreclosure rates or foreclosure homes for sale per households.
Arizona, which is among the top five in foreclosures, has a jobless rate lower than the national average. Utah andIdaho, with jobless rates among the lowest in the country, are among the top ten in foreclosures or foreclosure homes for sale per households.
Also, RealtyTrac data shows joblessness is causing foreclosures at just about the nationwide average in Oregon and Michigan and lower the nationwide average in North Carolina, South Carolina, Indiana, Rhode Island and Kentucky. The situation is the same in states with slow population growth such as Rhode Island and Michigan and states with rapid population growth such as South Carolina and North Carolina.
So what has been fueling the second wave of foreclosures? Studies by Pew and The New York Times correlated the rate of foreclosure filings or foreclosure homes for sale with neighborhoods that have large populations of minorities, especially blacks and Hispanic Americans.
An example is the 12.5 percent foreclosure rate in a Brooklyn neighborhood heavily populated by Latinos.
Other analysts however insist that the high number of foreclosure homes for sale in black and Latino neighborhoods is the significant number of low-income borrowers who were given high-risk adjustable-rate mortgage loans.
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