The sweeping, nationwide foreclosure crisis was a hallmark of the Great 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.
A new study by two sociology professors, Jason Houle at Dartmouth College and Michael Light at Purdue University, combines the two approaches for the first time. The paper (PDF), 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 and become real estate owned. REOs 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 REOs are poorly maintained, that could also have a stronger negative effect on the surrounding community, Houle says. The connections between the REO rate and the suicide rate are particularly strong. The analysis found a 5 percent increase in the rate of REOs 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.