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Despite the resurgence in home sales spurred by the decline in housing prices, it is almost certain that the rate of foreclosures will increase dramatically in the next one to three years and overwhelm the market's capacity to absorb them. In addition to the continuing impact of use of subprime lending in previous years, the primary reason for this is increased unemployment. At least in part as a direct result of the huge downturn in the housing market and in new home construction, the California unemployment rate has gone up dramatically. As of April 2009 it stood at 13.1 percent. Chart 3 demonstrates that the City is disproportionately affected by unemployment as compared to other geographical regions including the nation, state, and county. Chart 3 Unemployment Rates - April 2009 Source: State of California Employment Development Department Increases in unemployment are forcing many California residents into foreclosure, including those with conventional loans. Santa Ana residents are generally of lower income than those of other Southern California cities, and are more frequently employed in industries such as construction that have been most affected by the decline in the housing market. The greatest losses of jobs in the City occurred in the construction, manufacturing, trade and transportation, financial services, and business industries according to preliminary information for April 2009 released by the State of California Employment Development Department. As a consequence, Santa Ana residents have been harder hit by unemployment than residents of many other California cities, and are more susceptible to foreclosure. Although the economy has improved throughout the County, Santa Ana residents are still faced with higher unemployment than other California cities. As of August 2013, the City had a 9.9% NSP 2 Substantial Amendment - City of Santa Ana Page 5 29A -7