Zillow was out Wednesday morning with a new analysis of its data focusing on foreclosed homes. The conclusion, not surprisingly, was that those whose homes were lost to foreclosure did not profit. Those who bought the foreclosed properties did.

Homes that were foreclosed during the housing crisis have gained almost twice as much value as other homes, according to a new Zillow analysis. But the original owners of those homes have not benefited from that recovery.

Since low-end homes were much more likely to be foreclosed, the new analysis shows how the housing crisis worsened the gap between rich and poor in the U.S.

During the run-up to the housing bubble, many low-income earners bought homes, and the home ownership rate rose from about 65% in the mid-1990s to almost 70% in 2006i. When home values crashed in 2007, millions of homeowners had to walk away – abandoning their initial investment and missing the opportunity to gain equity as home values recovered.

Here are some key points from the report, which can be found at Zillow Research:

  • The rich-poor divide is growing in the U.S. In 2000, high-income householdsii made an average of six times as much income as the lowest third of households. In 2015, the top third made nearly seven times as much as the lowest third.
  • During the run-up to the housing bubble, many low-income earners bought homes, and the home ownership rate rose from about 65% in the mid-1990s to almost 70% in 2006.
  • Of all foreclosed homes, 46.7% were among the least expensive third of homes. Only 16.6% were among the most expensive third.
  • Foreclosed homes gained value faster than other homes, and in many markets, are more valuable now than they've ever been. Since the lowest point in the housing bust, the average U.S. home has risen 22% in value, while the average foreclosed home has risen 39% in value.
  • In many cases, investors bought foreclosed homes and converted them into rental properties, benefiting from the recovery as home values bounced back. The percentage of single-family homes being rented out has risen from 13% to 19% over the past decadeiii.

i Home ownership rate data is from the U.S. Census Bureau, Current Population Survey/Home Ownership and Vacancy Survey.
ii For this analysis, incomes were divided into a top, bottom, and middle tier. Income data came from census data.
iii According to the Current Population Survey March Supplement

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