High Energy Costs Lead to Mortgage Delinquency?
High Energy Costs Lead to Mortgage Delinquency?
Rising energy prices can raise mortgage delinquency rates, according to a new study in Energy Economics, “Do household energy expenditures affect mortgage delinquency rates?”
After all, rising utility costs can constrain home owners’ budgets, researchers from Boston University note. In fact, researchers found the rise in energy prices were connected to the 2008 financial crisis.
The researchers analyzed the percentage of U.S. mortgages that are 30 to 89 days past due and those that entered foreclosure, rates of home ownership, home prices, as well as the cost of household expenses on energy prices.
Researchers R.K. Kaufmann, as well as colleagues, from Boston University concluded: "Together, these variables account for much of the historical variation in the percentage of U.S. mortgages that are 30 to 89 days past due and indicate that the post 2006 rise in this measure of mortgage delinquency is associated with falling home prices, an increase in household expenditures on energy, and rising unemployment."
Source: “Energy Economics: Research From Boston University Has Provided New Information About Energy Economics,” Investment Weekly News (May 7, 2011) and “Do Household Energy Expenditures Affect Mortgage Delinquency Rates?” ScienceDirect (March 2011)
