No link between mortgage stress and crime, report says

In the wake of the housing market collapse, many real estate experts posited that some of the hardest-hit cities would experience increased crime rates, but a new report says this was not an accurate assumption.

In the wake of the housing market collapse, many real estate experts posited that some of the hardest-hit cities would experience increased crime rates, but a new report says this was not an accurate assumption.

In an examination of 142 major metropolitan areas, there were no convincing connections found between mortgage stress and crime rates, according to a report from Department of Criminal Justice at Indiana University in Bloomington.

"Despite anecdotal evidence of and growing fear that the foreclosure crisis was accompanied by increasing crime rates in cities hardest hit by the foreclosure crisis, we found no evidence that metropolitan areas with higher levels of housing-mortgage stress had higher rates of violent or property crime," researchers said.

Previous studies conducted on this issue only examined information on a state and national level. This was the first report of its kind to take public property data on a metropolitan level into account.

Meanwhile, it was noted that a more accurate way to compare crime with struggling housing markets is to examine negative equity, loan-to-value ratios and mortgage costs, rather than foreclosure activity. However, other factors such as unemployment and vacancy rates may play a role.



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