On the Street During the Great Recession: Exploring the Relationship Between Foreclosures and Homelessness

During the Great Recession, policymakers and advocates for the poor raised concerns that the foreclosure crisis, which forced millions from their homes, was causally linked to the concurrent rise in homelessness. Despite these warnings—and the widespread consequences of the economic collapse on the housing market—no national-level research has evaluated the connection between foreclosures and homelessness. In this study, I combine homelessness data from the U.S. Department of Housing and Urban Development (HUD) with foreclosure data from RealtyTrac to analyze changes over time in both phenomena on the metropolitan level. I find that foreclosures within a given year are significantly correlated with homelessness in the following year net of controls for demographic, housing, and economic characteristics, regional time trends, and metropolitan area fixed effects. This relationship is strongest among single homeless individuals (compared with families) and the unsheltered population. These descriptive findings carry important implications for our understanding of the Great Recession’s consequences and demonstrate the need for expanded data collection on homeless populations, with which we can better understand whether and how foreclosure leads to homelessness.