Rising gas prices may lead to more foreclosures in some areas

Sharp increases in gas prices nationwide may lead to an increase in foreclosures in some areas, according to the Wall Street Journal.

Many homeowners who had moved to Miami exurbs, such as Homestead, Florida, because they were unable to afford housing in the city during the height of the real estate market are now struggling due to high gas prices.

Many residents in the area work in Miami and must commute nearly 30 miles to work and back each day. Filling the tank can be a serious burden, as gas prices in the area have risen to around $3.40 per gallon, the source said.

"The people who bought in Homestead were generally people who were on the margin to begin with. It's not a good sign when gas prices go up and become an added cost factor for these struggling homeowners," said Ned Murray, associate director of the Metropolitan Center at Florida International University.

The area already has very high rates of foreclosure, the journal reported. According to CoreLogic's data, two zip codes in the Homestead area had more than 44 percent delinquent mortgages combined as of November.

Some people have begun voluntarily moving away, abandoning their homes due to underwater mortgages, the source reported. Statewide foreclosures remain high despite having dipped in late 2010, according to the Miami Herald.  

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