Housing Assistance Council Home prices in rural counties didn't rise as fast as those in the cities. But they haven't dropped as fast either. Rural housing was still gaining a little value even as prices plummeted in metro America.
After a year of recession and rising unemployment caused, in part, by a housing foreclosure crisis, nobody knows how widespread home foreclosures are in rural America. Nobody knows how many rural homeowners are losing their houses because nobody has bothered to count.
"It's ridiculous, it's embarrassing, it's stupid," Sen. Jay Rockefeller told West Virginia Public Radio’s Scott Finn. "And I'm going to fight to make sure everybody gets accurate information, and they get counted."
The most widely-quoted source of foreclosure information comes from a private company, RealtyTrac. RealtyTrac, however, doesn’t collect data for counties that have fewer than 10,000 housing units. As a result, the company reports foreclosure numbers for 2,200 counties, excluding more than 900 -- the nation’s most rural counties.
Congress and state legislatures pass bills aimed at reforming a home-loan market defined and analyzed as largely urban, without knowing whether the actual loan market that needs reforming is urban or not. Finn reports that the West Virginia legislature was considering a predatory lending bill, but lawmakers allowed the measure to die because they believed home foreclosures were a negligible problem in the state. After all, RealtyTract reported that there were only 500 foreclosures in West Virginia in 2007.
But Finn reports that when the Department of Housing and Urban Development did a count in West Virginia, researchers found 12,000 foreclosure notices since January 2007.
"They (legislators) were led to believe that West Virginia was unique and there wasn't a big problem here, which wasn't the case," a public interest housing attorney told Finn. "So nothing ever got done."
In fact, when HUD did its own count of home foreclosures, states with sizeable rural populations that had previously been considered in good shape were found to have much higher foreclosure rates. “On HUD's new list, rural states have significantly higher foreclosure rates,” Finn reports. “For example, RealtyTrac ranks Mississippi near the bottom. But HUD says it's in the top 10.”
A report issued last week on home foreclosures by the Housing Assistance Council finds that information about rural America is, at best, “murky…. Foreclosure activity has not been as well discussed or exposed in rural areas as conditions in cities and urban areas. This lack of investigation into rural mortgage markets is in part attributable to the dearth of quality information from which to assess the situation.”
The Housing Assistance Council (HAC) found that housing prices in rural America have not dropped as suddenly or as sharply as those in the cities. (Of course, rural housing prices didn’t rise as fast as in the cities either.) In fact, the graph above shows that housing prices across rural America have continued to go up, although at a slower pace. 
Housing Assistance Council RealtyTrac is the service most people refer to when they measure the extent of home foreclosures. But the private company doesn't look at 900 rural counties (those in yellow). Click on the map for a closer look.
HAC found that “17 percent of all home purchase originations were high cost loans, accounting for 11 percent of all high cost loans nationwide.” Minority home buyers disproportionately have these high cost loans.
Still, nobody really knows. In June 2008, HAC reports, RealtyTrac counted 1.5 million homes in some state of foreclosure. The private company said 76,369 of these were in rural communities, about five percent.
Nobody really believes that rural America, with 20 percent of the population, only has five percent of the foreclosures. But since RealtyTrac ignores 900 rural counties, we can't know what the true rate was a year ago…or is today.
The best count in rural areas may come from HUD, as a result of legislation passed this year. The federal agency used a number of sources to estimate that 5.3 million homes were in some state of foreclosure or were seriously delinquent at some point over the last two years. HUD found that 10.8 percent of metropolitan homes and 10 percent of rural homes (or 738,000 homes) fell into this troubled category. 
Housing Assistance Council When the Department of Housing and Urban Development looked at all counties, the federal agency found foreclosure rates in rural areas about equal, on average, to the cities. Click on map for closer look.
HAC makes the good point that none of the various estimates includes manufactured housing, a major source of rural dwellings. Nationwide, 7 percent of all housing units are mobile or manufactured homes. In rural areas, however, that percentage doubles.
HAC notes that the manufactured housing industry, fast growing in the 1990s, has been in a slump recently. Manufactured housing companies have gone bankrupt. Rural unemployment is especially high in the counties dependent on the manufactured housing industry. Shipments of manufactured housing are at a decades-long low. And delinquency rates among mobile home borrowers have risen.