It goes without saying that foreclosures aren’t good for home owners getting that notice from the bank. While there are a large and ever-growing number of studies about the financial impacts of the housing bust on everyone from home owners to bankers to construction workers until recently there hasn’t been a lot of serious research about other effects of foreclosures, especially effects on people’s health. A recent research paper “Is the Foreclosure Crisis Making Us Sick” by Janet Curie of Princeton and Erdal Tekin of Georgia State provides hard numbers — foreclosures increase hospital visits for a range of both physical and mental stress-related illnesses.
A few highlights from the paper: The authors look at emergency room visits and hospitalization but exclude elective procedures; they focus on stress related ailments. The study covers activity in four states — Arizona, California, Florida and New Jersey. In 2008 these four states accounted for almost 50% of the foreclosure filings reported by RealtyTrac. Three of these states are among the hardest hit in the S&P/Case-Shiller Home Price data; New Jersey is not covered in the SPCS numbers. The research uses data on foreclosures, real estate owned (REOs, property owned by lenders) and hospital admissions zip code by zip code.
Health effects are greater for those aged 20-64 than for people 65 and over. Among the younger group, the effects are greater for 20-49 than 50-64. Two differences seem to drive the age results — those over 65 have access to medicare and may face fewer financial issues in obtaining medical care while foreclosures seem to focus largely on the 20-44 age group. Both the number of foreclosure notices issued and the number of properties in the REO category make a difference. The research and results are far more detailed than summarized here.
That foreclosures can take a toll on the health of those closest to economic turmoil is no surprise. How much of a toll may be a surprise: an increase of 100 foreclosures in a zip code – about average for the data in the study — raised hospital admissions for hypertension by 7% for those 20-49 years old. Visits for anxiety rise by 12% for the same increase in foreclosures. Clearly there are significant non-economic effects from the housing bust.