SEATTLE, July 13, 2016 /PRNewswire/ -- 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 homeownership rate rose from about 65 percent in the mid-1990s to almost 70 percent 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 homeownership rate rose from about 65 percent in the mid-1990s to almost 70 percent in 2006.
• Of all foreclosed homes, 46.7 percent were among the least expensive third of homes. Only 16.6 percent 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 percent in value, while the average foreclosed home has risen 39 percent 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 percent over the past decadeⁱⁱⁱ.

"Income inequality is an important topic in the U.S. right now, because the gap between the richest and poorest Americans is growing," said Zillow Chief Economist Dr. Svenja Gudell. "Many lower-income Americans lost their homes during the foreclosure crisis, forcing them to pay ever-increasing rents and locking them out of the benefits of the housing market recovery."

About Zillow

Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Zillow also sponsors the bi-annual Zillow Housing Confidence Index (ZHCI) which measures consumer confidence in local housing markets, both currently and over time. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ:Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

                                                                  
ⁱ Homeownership rate data is from the U.S. Census Bureau, Current Population Survey/Homeownership 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

SOURCE Zillow