Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

K-State economist's research on low-income homeowners

24.11.2008
Suggests need for support after home purchase

Programs that help low-income and minority individuals and families purchase a home may be doing more harm than good, according to a Kansas State University economist.

When vulnerable homeowners don't get support after they purchase a home -- maybe one they really couldn't afford in the first place -- they're more likely to return to renting, said Tracy Turner, K-State assistant professor of economics. She and Marc Smith, professor of finance and director for the Institute of Housing Studies at DePaul University, are publishing their research in a forthcoming issue of the Journal of Regional Science.

"Moving vulnerable renters into homeownership without post-purchase support wastes tax dollars as well as creates great hardships for these new homeowners who lose their homes," Turner said. "Our research sheds light on homeowner sustainability and the need for post-purchase support for vulnerable households. It suggests that past homeownership policies are in part contributing to the current home foreclosure crisis."

Turner and Smith studied how populations with low homeownership rates also leave homeownership at high rates, either through foreclosure or selling the home. From 1970 to 2005, they found that low-income homeowners were consistently more likely to exit homeownership than higher income households. Hispanic households had higher exit rates before 1997 but not after.

They also found that a gap between blacks and whites exiting homeownership arose after 1997. Turner said this could be because policies in the 1990s that encouraged minority homeownership were not sustainable in the long term.

"Policy initiatives made resources available to move renters into owning although they could not own without assistance, and these initiatives failed to provide post-homeownership counseling or support," Turner said. "As a result, renters who became homeowners through relatively easy entry conditions could not sustain homeownership."

Turner said their research is the first to find that the homeownership gap before 1997 is because fewer blacks were becoming homeowners in the first place, not because they were leaving homeownership at higher rates.

Because homeownership offers many benefits, Turner said it is important to understand why black, Hispanic and low-income households are less likely to own their housing. As renters, they are missing out on the benefits homeownership can provide.

"In order to design policies that will allow underrepresented groups to attain homeownership and remain homeowners, we need to understand why certain groups have lower homeownership rates to begin with," she said.

An important area of future research, Turner said, would be to look at how much of the foreclosure crisis is attributed to these types of policies versus how much of it is because of liberalized lending standards, predatory lending and house-price declines.

Tracy Turner | EurekAlert!
Further information:
http://www.k-state.edu

More articles from Business and Finance:

nachricht Mathematical confirmation: Rewiring financial networks reduces systemic risk
22.06.2017 | International Institute for Applied Systems Analysis (IIASA)

nachricht Frugal Innovations: when less is more
19.04.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Fizzy soda water could be key to clean manufacture of flat wonder material: Graphene

Whether you call it effervescent, fizzy, or sparkling, carbonated water is making a comeback as a beverage. Aside from quenching thirst, researchers at the University of Illinois at Urbana-Champaign have discovered a new use for these "bubbly" concoctions that will have major impact on the manufacturer of the world's thinnest, flattest, and one most useful materials -- graphene.

As graphene's popularity grows as an advanced "wonder" material, the speed and quality at which it can be manufactured will be paramount. With that in mind,...

Im Focus: Exotic quantum states made from light: Physicists create optical “wells” for a super-photon

Physicists at the University of Bonn have managed to create optical hollows and more complex patterns into which the light of a Bose-Einstein condensate flows. The creation of such highly low-loss structures for light is a prerequisite for complex light circuits, such as for quantum information processing for a new generation of computers. The researchers are now presenting their results in the journal Nature Photonics.

Light particles (photons) occur as tiny, indivisible portions. Many thousands of these light portions can be merged to form a single super-photon if they are...

Im Focus: Circular RNA linked to brain function

For the first time, scientists have shown that circular RNA is linked to brain function. When a RNA molecule called Cdr1as was deleted from the genome of mice, the animals had problems filtering out unnecessary information – like patients suffering from neuropsychiatric disorders.

While hundreds of circular RNAs (circRNAs) are abundant in mammalian brains, one big question has remained unanswered: What are they actually good for? In the...

Im Focus: RAVAN CubeSat measures Earth's outgoing energy

An experimental small satellite has successfully collected and delivered data on a key measurement for predicting changes in Earth's climate.

The Radiometer Assessment using Vertically Aligned Nanotubes (RAVAN) CubeSat was launched into low-Earth orbit on Nov. 11, 2016, in order to test new...

Im Focus: Scientists shine new light on the “other high temperature superconductor”

A study led by scientists of the Max Planck Institute for the Structure and Dynamics of Matter (MPSD) at the Center for Free-Electron Laser Science in Hamburg presents evidence of the coexistence of superconductivity and “charge-density-waves” in compounds of the poorly-studied family of bismuthates. This observation opens up new perspectives for a deeper understanding of the phenomenon of high-temperature superconductivity, a topic which is at the core of condensed matter research since more than 30 years. The paper by Nicoletti et al has been published in the PNAS.

Since the beginning of the 20th century, superconductivity had been observed in some metals at temperatures only a few degrees above the absolute zero (minus...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Call for Papers – ICNFT 2018, 5th International Conference on New Forming Technology

16.08.2017 | Event News

Sustainability is the business model of tomorrow

04.08.2017 | Event News

Clash of Realities 2017: Registration now open. International Conference at TH Köln

26.07.2017 | Event News

 
Latest News

Gold shines through properties of nano biosensors

17.08.2017 | Physics and Astronomy

Greenland ice flow likely to speed up: New data assert glaciers move over sediment, which gets more slippery as it gets wetter

17.08.2017 | Earth Sciences

Mars 2020 mission to use smart methods to seek signs of past life

17.08.2017 | Physics and Astronomy

VideoLinks
B2B-VideoLinks
More VideoLinks >>>