Soaring unemployment rates and an overheated housing market have left many Americans the feeling the heat financially. In some states that heat's hotter than in others.
With foreclosure filings up 112% from the first quarter of 2007, MainStreet decided to analyze foreclosure filings over the past year. We asked RealtyTrac, a real estate tracking website, to summarize the findings from monthly reports to reflect the foreclosure rate for the 12-month period ending March, 2008. In addition, just to give a fuller snapshot of what’s happening the states we mention, we are giving you the average unemployment rate—based on figures from the Bureau of Labor Statistics—for the first quarter of 2008, as compared with the same period last year.
Here are the 5 hardest hit areas, by state:
Foreclosure rate: 1 out of 14 households.
Unemployment rate: 5.8% (compared to 4.6% in the first quarter of 2007).
The Lowdown: "Inflated home prices and speculative buying –especially in the condo market, where a lot of projects went bad," may be part of the reason many people are having difficulties, says Rick Sharga, vice president of marketing at RealtyTrac. In Sin City, a.k.a. Las Vegas, one out of 44 households is in various stages of foreclosure.
Foreclosure rate: 1 out of 23 households.
Unemployment rate: 6.3% (compared with 5.3% in the first quarter of 2007).
The Lowdown: In the first quarter of 2008, 11 of the metro areas in California were among the top 30 for highest foreclosure rates nationwide. “People bought overvalued houses using risky loans," says Sharga "[They] couldn’t afford the higher payments when the loans reset.”
Foreclosure rate: 1 out of 26 households.
Unemployment rate: 4.6% (compared with 3.5% in the first quarter of 2007).
The Lowdown: Things are looking a little gloomy for the Sunshine State where 7 of the state's metro areas are in the top 30 for highest foreclosure rates nationwide. This is another market that may have been hit hard from speculative buying and home prices, according to Sharga.
Foreclosure rate: 1 out of 28 households.
Unemployment rate: 4.7% (compared to 3.9% in the first quarter of 2007).
The Lowdown: "[Colorado is] suffering from a home inventory glut caused by over-building by new home builders, and exacerbated by unregulated mortgage brokers who [in the case of a small number of practitioners] took advantage of lax lending standards," says Sharga. With 1 out of 77 homes in the Denver-Aurora metro area experiencing foreclosure difficulties, the state's housing market is as rocky as its mountains.
Foreclosure rate: 1 out of 30 households.
Unemployment rate: 4.1% (compared with 3.7% in the first quarter of 2007).