MADISON, Wis. (10/4/10)--The U.S. Census Bureau’s recently released 2009 American Community Survey (ACS), which provides information on the nation's population, has some ramifications for U.S. credit unions, according to a Credit Union National Association (CUNA) economist. Wednesday’s release is based on survey responses collected during 2009 and provides data on the U.S.’ socioeconomic, housing and demographic characteristics. For median household income, the ACS shows:
* Real median household income in the U.S. fell between 2008 and 2009-- decreasing by 2.9% to $50,221 from $51,726; and * Between 2008 and 2009, real median household income decreased in 34 states and increased in one: North Dakota.
Regarding poverty, ACS data show that:
* Thirty-one states saw increases in both the number and percentage of people in poverty between 2008 and 2009; and * No state had a statistically significant decline in either the number in poverty or the poverty rate.
“The thing that causes poverty is job loss and the inability to find jobs,” Mike Schenk, CUNA senior economist, told News Now
. “The immediate effect of job losses is rising delinquencies and charge-offs. We already lived through that. “Increases in unemployment mean incomes go down,” he added. “That effect is softened by the [government] social safety net. Nevertheless, when incomes go down, we see higher delinquencies and charge-offs. Since 2010, the deterioration in labor markets has stopped. Labor markets are beginning to heal themselves, so incomes should go up. “We’ve seen declines in delinquency rates at credit unions, but they’re just marginal improvements,” he continued. “The longer-term effects of higher poverty rates don’t express themselves in delinquencies and defaults; they mean people don’t get loans and credit is not as readily available. Less credit available means less spending and less economic growth.” For home values:
* In 2009, the median property value for owner-occupied homes in the U.S. was $185,200; * After adjusting for inflation, the median property value decreased in the U.S. by 5.8% between 2008 and 2009.
Regarding rental housing costs:
* Nationwide, roughly two in five renter households (42.5%) experienced housing costs that consumed 35% or more of their incomes; and * Housing cost burdens ranged from a low of 23.2% of renting households in the Casper, Wyo., metro area to a high of 62.8% of renting households in the College Station-Bryan, Texas, metro area.
“Declines in home values in the short-run mean higher delinquencies and defaults, but we’ve lived through most of that already, so most of the nasty consequences of that are behind us,” Schenk said. “However, declines in home values mean that people are less willing and able to borrow money and to spend. “People can’t tap into home equity because there’s less of it or it doesn’t exist,” he continued. “The labor force is a lot less mobile. If a house is worth less than you pay for it, you’ll be less able to sell it and move to where the jobs are. “So it prolongs the difficulties in the labor market and tends to be a self-reinforcing cycle,” Schenk concluded. The first set of 2010 Census data, including the nation’s population and congressional apportionment figures for the states, will be released by the end of 2010. To see the ACS release, use the link.