First, the foreclosure rate increases with the distance from the metropolitan core. Arlington has the lowest foreclosure rate in the region, followed by Alexandria and Fairfax County. Likewise, the affluent, largely white, zip codes in northwestern Washington, D.C., also have a very low foreclosure rate. Outlying jurisdictions such as Spotsylvania and Warren counties in Virginia, Charles County in Maryland and Jefferson County in West Virginia have among the highest foreclosure rates. This reflects the fact that property values have held up better in the urban core than in the metropolitan periphery.
Which brings us to the second observation. The major exception to the preceding rule is that zip codes dominated by African-Americans — eastern Washington, D.C., and “suburban” Prince George’s County, Md. — have a much higher foreclosure rate.
Why would African-Americans suffer from a higher foreclosure rate? I offer a hypothesis, which I will quickly retract should conflicting data be brought to my attention. The hypothesis is this: When housing prices were zooming higher in the 2000s, banks shoveled out money for real estate loans most recklessly for sub-prime loans. Less affluent Americans, who were disproportionately African-American, bought into real estate near the top of the market and, thanks to the collapse in lending standards, were less able to keep up their mortgage payments when the economy, and housing prices, collapsed.
— James A. Bacon