PAWTUCKET – Residential foreclosures dropped 11.4 percent statewide in 2012, but Central Falls, Pawtucket and Woonsocket still have some of the highest foreclosure rates in the state, a new survey says.
The HousingWorks RI survey says 37 foreclosure deeds were filed in Central Falls in 2012, 14 percent fewer than 2011. But the rate of foreclosures represented 3.1 percent of the city’s overall housing stock, making it the state’s top city in the state for foreclosures.
Pawtucket finished fourth, with 132 foreclosures, or 1.5 percent of the housing stock, while Woonsocket ranked third, with 86 foreclosures or 1.7 percent of the housing stock. The statewide average was .09 percent.
Still, foreclosures were down 21.4 percent in Pawtucket, and nearly 20 percent in Woonsocket, from 2012 rates.
HousingWorks said a total of 10 communities ended 2012 with higher foreclosure rates than the state average, including all of the state’s largest cities. The Blackstone Valley had the dubious distinction of capturing three of the top four spots, the exception being Providence, which finished second.
“While we’re encouraged by the decline in number of residential foreclosure deeds filed in Rhode Island last year, we know many homeowners are still struggling,” said Nellie M. Gorbea, executive director of HousingWorks RI. “It’s essential for policymakers to consider how high housing cost burdens affect not only Rhode Islanders, but our local economies when developing policies to promote economic growth.”
While foreclosures appear to be leveling off, HousingWorks said many homeowners continue to face disproportionately high housing costs that leave them vulnerable to foreclosure in the future.
“Four in 10 households with a mortgage are considered cost burdened because they spend more than 30 percent of their income on housing costs,” said Jessica Cigna, the research and policy associate at HousingWorks RI.
She said data from the U.S. Census Bureau suggests that in many of those households at least one family member is unemployed.
Other highlights from the study:
• Foreclosure deeds statewide are down a total of 36 percent from 2009.
• A total of 1,617 residential foreclosure deeds were filed in Rhode Island during 2012, representing a 23 percent decline from the previous year.
• In 2012, 0.9 percent of the state’s mortgaged housing stock was foreclosed, down from 1.13 percent in 2011.
Cigna said the housing bubble may have triggered the foreclosure crisis, but the latest data suggests that the problem is more closely linked to lingering unemployment, which makes housing unaffordable for many.
“It could be we’ve cycled through the bulk of foreclosures that were created through the housing bubble, and the foreclosures we’re seeing now are consistent with the state’s persistent unemployment rate,” she said.
If there is a lesson for state lawmakers and other policymakers in the latest data, it’s that price-burdened homeowners are not simply locked out of the economic recovery, they’re helping keep the economy sluggish. Voters in the 2012 statewide election approved a two-year, $25 million affordable housing bond to continue building more low-cost housing, a laudable down payment on solving the problem, according to Gorbea.
“Had we had more investment in affordable housing early on we might have been able to stem some of the tide brought on by the housing crisis,” said Gorbea. “We need to look at affordable housing as part of the state’s economic infrastructure.”