Mortgage Market Conditions in Louisiana
So we all hear about the bad mortgages and foreclosures around the world on the nightly news. There are always stories about families losing their homes to foreclosure since they are now unable to pay their sub-prime mortgage. I hear these stories as well, but I wondered why Louisiana has been somewhat sheltered from the worst. I did a bit of research on our mortgage market and found some helpful info that may explain (at least in part) why we have been able to avoid huge foreclosure numbers.
Based on a report created by the National Association of Realtors in 2008, these statistics give a snapshot of the mortgage market in Louisiana:
- 44% of homes are owned free in clear - 32% is the national average
- Sub-prime exposure is 8% - 9% is the national average
- Sub-prime loans account for 54% of foreclosures (from NAR in 2008 may have changed)
These stats show that we have much more home ownership without a loan in Louisiana than in other states. This means that we have less potential for foreclosures since there are fewer houses with loans. Also, since sub-prime loans account for the majority of foreclosures and we have 11% fewer sub-prime loans than the national average, our exposure is less.
I know that this is not earth-shattering information, but I thought it was interesting at least! There are other reasons as to why we have been insulated from a huge real estate collapse, but the above facts certainly play a role.