Americans continue to see a rise in foreclosures as the mortgage bubble shows signals that it is about to pop. However, many families feel stuck because they do not want to uproot their children and they cannot afford their current residence.
With over 250,00 new families entering foreclosures every three months, it begs the question of how potential foreclosures affect children and their emotional development.
What we know from history
The best way to approach that answer is to look at our history, including the economic crash of 2008. Many families struggled and lost their homes after the mortgage bubble crashed, and there were roughly 2 million children who lost their homes across the United States.
A research study from 2015 analyzed how families who defaulted on mortgage loans in the mid-2000s faired after the economic crash. There was a strong correlation between families with foreclosures and a rapid decline in their overall well-being. Many of those families and children relied on government programs and family support to find stability.
When children do not feel safe and stable in their routines, it inhibits emotional development and often results in unhealthy coping mechanisms such as drug use or alcohol dependency. Even on a societal scale, a whole generation of children who saw the economic crash are now adults who are terrified to invest in real estate or family homes.
There is also data to suggest that children of stable homeowners tend to perform better in school, make friends easily among their peers and even experience fewer behavioral problems.
Luckily, parents do not have to let foreclosure be their sole option. They can help their children’s well-being and seek out different options that allow them to restructure their loans and pay off major debt.
