Femenomics 220 - The Housing Crisis

I spent the last couple of weeks researching a theory of mine about the latest housing bubble burst and the current U.S. economy. What I found didn't really surprise me. The relationships between liberal pro-female legislation concerning lending and home buying and mandatory child support laws gave women an edge in the home lending arena.

This article lists some of this legislation and it's effect on banks and lending : http://orient.bowdoin.edu/orient/article.php?date=2008-10-24&section=2&id=3

In 1987 single women made up about 10% of home purchases. By 1997 that figure had jumped to 18%. By 2003 it had jumped to 22%. Men stayed flat over this time at about 9%. Yet other studies show that women make up a higher percentage of sub-prime and A rated loans compared to men in the same income bracket. What the sub-prime study didn't show was the overall credit score relation or the amount of income from child support or government support in each income bracket. Sadly I cannot find any figures on percentages of those numbers in overall income.

Also in the late 90's child care was removed as a living expense in home loan acceptance.

More recent figures showed Fannie Mae as estimating single female home ownership to increase to 28% by the end of 2009, yet one report from the Realty Times reported 40% of all home buyers being women in 2007 again while single male home buyers percentages remained flat or even reduced in numbers. Single women also became the largest group of buyer in condo sales (47%) during this time.

My research leaves alot of holes and unanswered questions. Studies show that more women than men took sub-prime loans. Sub-prime loans are the most widely blamed cause for the housing bubble yet without figures for how much income was reported from child support, alimony or government support I cannot prove any hard facts. I also was unable to find any statistics related to gender and recent foreclosures. I am assuming that will take a few years to show itself.

What is interesting is that if you take what I believe is the average years child support would be paid, roughly 7 to 9 years, and add that to the beginning of the single female housing boom numbers after the loan legislation became law and took effect you get to about 2007. Just the time period economist started seeing a real problem develop with sub-prime loans. How much effect the He-cession and men finding themselves unable to pay support has had remains unclear.

The only true relationship that can be made at this time is that single women make up the largest portion of home loans by gender, although they still MAY, and that is a not confirmed since 2005, be the second largest overall behind married couples. If they haven't caught up to married couples they are right behind them thats for sure. Single women home buyers also make up the highest number of sub-prime and A rated loans and it is these loans which caused the housing bubble.

I think the final conclusion is obvious but I will leave that upto you to make until the overall figures on foreclosures become available.

One final factor which I became aware of was the accusations that women were "saddled" with sub-prime loans more often than men. Again I could find no mention of credit scores in the overall findings of who was offered what type of loan only overall income levels. One quote I found pertinent was:

A Federal Reserve Bank of Atlanta study found that mortgage
borrowers that lack financial information and those that are reluctant to negotiate
aggressively are more likely to receive higher cost mortgage loans

I find it difficult to believe that women are being discriminated against in home loans with the current government regulations on such things. My take is still on the overall credit scores.

In the end we will have to see how the final figures come out but I am putting my money on a much higher ratio of loan defaults by women compared to men.