A few weeks ago I did a blog on the country’s foreclosure rates. For that blog I made maps that showed those rates at the state level based on our regularly updated datasets from RealtyTrac in Finder!. Recently, we have added a dataset from HUD that estimates foreclosure rates at the county level. Unfortunately the data are from June of 2008 but it still paints a good picture of the spatial pattern of the housing crisis. In the previous blog I compared STATE foreclosure rates with COUNTY unemployment rates; which is like comparing apples and oranges. I wanted to go back and compare the two indicators at the same geographic level.
This first map shows the June 2008 Estimated Foreclosure Rates by county.
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The second map shows June 2008 Unemployment Rates by county
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I wanted to classify the data for these maps using the equal interval option. That way, the extreme highs are more evident even though variety among the lower rates are not. The darker colors on each map show where the highest rates are.
Lastly, I ran a correlation of the two using Maker!’s Correlation Tool to see if there was a clear relationship. The results show little relationship. See the graph below to better understand the results.
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While most of the counties (each county is represented by a dot on the graph) do fall within a certain range of the slope (the black line in the graph), there are some interesting outliers. The map created by Maker! to display the correlation results shows us where those outliers are. Alaska seems to contain the counties in orange that have extremely high unemployment rates with very low foreclosure rates. Meanwhile, the midwest seems to contain many of the counties in dark blue with high foreclosure rates and lower unemployment.
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Just because the correlation score is low does not mean that unemployment and foreclosures are not linked. Obviously, if a person loses their job and can no longer pay their mortgage, they may loose their home. However many people who loose their jobs do not own a home and would not effect the foreclosure rate. Further the housing crisis during 2008, when the data are from, was more a result of bad loans than an increase in unemployment. Its isnt until later that the bad economy would cause major job losses and therefore increase the foreclosure rates. Further, many people lost their homes not because they lost their jobs but because their mortgage payments were simply to big. This is especially true for the balloon morgages which increased dramatically over time. Also, there are many local factors that are unaccounted for effecting both unemployment and foreclosure rates in each county. Nonetheless, the pattern seen in the correlation graph is interesting and perhaps worth further investigation.
I hope these maps were interesting. Please dig into this foreclosure dataset and perhaps even run your own correlation!
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December 2nd, 2009 at 4:35 pm
Generally I do not post on blogs, but I would like to say that this post really forced me to do so! really nice post,and very informative.
December 15th, 2009 at 9:26 pm
Thank you for your great comment, Im glad you found the post helpful. And I hope you post again on our blog.