The Five States Hit Hardest by Foreclosures

Soaring unemployment rates and an overheated housing market have left many Americans feeling the heat financially. That heat's hotter in some states 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 Web site, 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 in 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 five hardest-hit areas, by state:

Nevada

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 Las Vegas, one out of 44 households is in various stages of foreclosure.

California

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."