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The Journal Gazette

Saturday, December 05, 2015 10:03 pm

Incomes stagnant since '09

Ron Shawgo | The Journal Gazette

Hoosier incomes have made little gain since the Great Recession, and when adjusted for inflation, have actually lost ground, according to recently released census estimates.

In addition, homeownership in Indiana has yet to rebound to pre-recession levels, reflecting a national trend, while home values remain level.

The results are from the U.S. Census Bureau’s American Community Survey covering a five-year period ending in 2014. The recession officially ended in June 2009.

Stagnant incomes were reported throughout northeast Indiana. While estimates show a 2 percent increase in Allen County since 2009, median household incomes dropped an estimated $3,700 to $49,124, when adjusted for inflation.

Figures for the U.S. and Indiana showed similar declines.

Real income has been declining across the U.S. since the late 1990s, said Matt Kinghorn, an economic analyst in Bloomington for the Indiana Business Research Center. Indiana median household income adjusted to 2014 dollars reached a high of $58,000 in 1999. It had dropped to $48,000 last year.

"You see incomes rise but over the last 10 or 15 years it really hasn’t kept up with the rate of inflation," Kinghorn said. "So the purchasing power of the average household has eroded a bit over the last 10 or 15 years."

Ellen Cutter, director of the Community Research Institute at IPFW, is encouraged by recent regional per capita income figures, which have outpaced Indiana and the nation. Those figures show the 11-county northeast Indiana region with 21.5 percent per capita growth between 2009 and 2014. That’s compared with 17.8 percent for Indiana and 16.9 percent for the U.S.

"Since 2010, we’ve actually had five straight years within the region of per capita growth," she said. "And every year it actually adds another billion dollars to our economy. So, when you look at the change over the five-year period it’s an additional $7,000 for every man, woman and child."

Homeownership, at the epicenter of the recession as many people lost homes to foreclosure, has yet to recover. About 33,000 fewer Hoosiers owned homes in 2014 compared with five years earlier.

While ownership of occupied housing units generally ranged between 70 percent and 85 percent in northeast Indiana counties at the end of the recession, most had declines of 1 percent to more than 3 percent by last year.

Pointing to tightened mortgage lending practices, Kinghorn said he doesn’t expect to ever see homeownership rates as high as they were before the recession.

"People talk about the house price bubble, but there’s really also maybe a bit of a homeownership bubble as well at the same time," he said. "So we may see homeownership rate tick up a little bit going ahead, but I don’t know if we’ll ever seen them as high as they were before the housing crash."

Indiana home values weren’t hit nearly as hard as those elsewhere, Kinghorn said. The nationwide price bubble was driven by the West, Southwest and Southeast. In Indiana, prices declined but not like in those other regions, he added.

While median values dropped by about $10,000 nationwide, Indiana rates remained rather level. Statewide, home values increased an estimated $2,500 to $122,700.

rshawgo@jg.net