‘Taking Stock’ of Rural Housing

[imgbelt img=Cover.jpg]While the recent housing crisis is not to be overlooked, far too many rural residents have struggled with housing problems and inadequacies for years, if not decades, before the national crisis hit. These are among of the key findings from the Housing Assistance Council’s (HAC’s) recently released “Taking Stock” report.


Editor’s Note: Every ten years, after a new Census, the Housing Assistance Council reviews the condition of rural housing in a publication called Taking Stock. (Get a full copy here.) Here are the key findings from this year’s report.

[imgcontainer left] [img:Price.jpg] [source]Housing Assistance Council

Rural housing prices followed national trends — only without the extremes.

Over the past decade the United States economy fell into one of the most severe economic recessions in a half century. 

Unemployment rates reached generational highs, and substantial wealth and equity have been stripped from home values following the housing market crash. Millions of American households had trouble meeting their mortgage payments and lost their homes, while many still face foreclosure or eviction. 

Not surprisingly, the economic and housing crisis impacted rural mortgage access and provision. Rural areas have seen declines in both housing production and mortgage lending. Applications to purchase homes in rural and small town areas declined by 56 percent between 2003 and 2010. 

One factor widely linked to the national housing crisis was dramatic housing price growth. 

Starting in the early 2000s, unprecedented, and in many instances unsustainable, price increases drove the housing frenzy. 

But there is some indication that the boom and bust cycle for housing prices experienced in many markets did not follow the same pattern in rural America. Still, housing prices outside metropolitan areas eventually declined into negative territory and have lagged behind national price appreciation rates as some housing markets begin a recovery. 

How Bad Was It For Rural Housing?

The foreclosure crisis was at the center of the national economic discussion for much of the past decade.  Uncharacteristic for housing issues, foreclosures garnered substantial attention from the public, policy makers, and the press.  

But foreclosure activity has not been as well analyzed in rural areas as for cities and suburbs. The primary constraint is a lack of publically available and reliable data on rural mortgage performance.  

While the problem of rural foreclosure remains murky, it is safe to assume that hundreds of thousands of rural households were, or continue to be, impacted by the foreclosure crisis. 

Furthermore, these housing problems may linger in rural communities due to a lack of economic vitality and diversification. 

Many Rural Communities Were In Trouble Before

Affordability has become the most significant housing challenge in rural America, especially for low-income households and renters. 

Despite the fact that housing costs are lower in rural areas, an increasing number of rural households find it difficult to pay their monthly housing expenses. Over 7 million rural households – three in ten – pay more than 30 percent of their monthly incomes toward housing costs and are considered “cost-burdened.” 

The incidence of rural and small town households that pay more than 30 percent of their income on housing increased by a full six percentage points between 2000 and 2010. 

Housing affordability problems are especially problematic for renters. Approximately 47 percent of rural renters are cost burdened, and nearly half of them are paying more than 50 percent of their monthly incomes for housing.