Empirical Economic Bulletin, An Undergraduate Journal


Over the past 28 years the United States has seen its share of prosperity and hard times. At times there have been significant increases in the number of subprime mortgages issued in the United States. Studies have shown that the number of foreclosures is highly correlated to the number of subprime loans issued. Another main issue that seems to occur with the abundance of loans and the spike in foreclosures is that crime rates tend to also increase during these times. The two major crimes that will be taken into account are violent crime and property crimes. I use foreclosure, income, and crime data from various databases from 1980 to 2008. The purpose of this paper is to determine the relationship between United States foreclosure rates and crime rates. Results from simple regression models suggest that the increase in foreclosures is significantly related to crime level increases across the United States. I conclude with the discussion of implementing social and educational programs to help the less fortunate that are on the verge of losing their homes.