May 27, 2014
The sweeping, nationwide foreclosure crisis was a hallmark of the recession, and as the worst of the crash recedes, researchers are learning more about the economic and social ramifications of losing a home. Research has already established connections between foreclosures and a host of physical and psychological problems, as well as the relationship between unemployment and the suicide rate.
The paper, from the June issue of the American Journal of Public Health, found that even when taking into account other socioeconomic factors such as unemployment, the higher a state’s foreclosure rate, the higher the suicide rate.
The analysis shows a particularly strong connection between foreclosures and the suicide rates of the middle-aged, considered 46 to 64 years old in the study. That helps explain some changes that have been unique to the recent downturn.
“We have seen suicide rates go up in the recession, but that’s not the big news,” says Houle. He says the “real public health puzzle” is that the increase was really driven by the rise of suicide rates of the middle-aged.
Historically, the elderly were most likely to commit suicide, but for the first time since the data have been collected, the middle-aged recently surpassed the older group.
“It does look like rising home foreclosures explain a little less than 20 percent of the rise in suicide rates among the middle-aged,” Houle says. That may be because that age group has the highest levels of homeownership, and “losing key assets and wealth close to retirement age is likely to have a profound effect on the mental health and well-being” of the middle-aged, the researchers wrote.
Houle and Light also looked at the effects of when homes are repossessed by banks. Repossessed properties can be a greater indicator of distress than the overall foreclosure rate, which can include less punitive resolutions like short sales.
When banks take back foreclosed homes, they’re also responsible for maintaining the properties – which they have done with mixed success. If the bank-owned properties are poorly maintained, that could also have a stronger negative effect on the surrounding community, Houle says.
The connections between the repossession rate and the suicide rate are particularly strong. The analysis found a 5 percent increase in the rate of repossessions corresponds to a 25 percent increase in the suicide rates of the middle-aged.
For researchers, the crisis provides an ongoing – if unfortunate – source to learn from. Although the foreclosure rate is the lowest it’s been since late 2008, it’s still higher than normal.
(*)Karen Weise is a Bloomberg writer