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ESCALATING unemployment in both Nevada and California has triggered an increase in home foreclosure rates, shrinking any hope that the housing crisis will end and the economy will recover.
Nevada has the highest home foreclosure rate in the nation at 6% while California is at the fourth spot with 2.94%, data from CA-based listing service RealtyTrac showed. A majority of foreclosed homes in Nevada, however, are owned by California residents.
In past recessions in the US, the housing industry had helped get the economy back on track. Home builders built more lower-priced homes that enticed more buyers. Increased consumer spending had helped the economy recover during past downturns.
But a recent Associated Press (AP) analysis showed that such is not inclined to happen this time.
For one, continued unemployment in the country makes it difficult for homeowners to pay their monthly housing payments.
Job losses in Nevada, in June alone, reached a staggering 12%, the worst in almost three decades. The figure is higher than the nation’s unemployment rate of 9.5% in June.
Dwindling visitor volume of this tourist destination caused massive layoffs from the hotel and casino industry since the start of the year, NV Senator Harry Reid said. City officials blamed the decline in visitors to the bad economy.
California’s 11.6% unemployment rate, meanwhile, is the highest on record post World War II. Even the government, often thought of as a stable part of the economy, had started to lay off its employees, according to a report from the Los Angeles Times.
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