Where the housing crisis is worst

So where's ground zero for the U.S. housing crisis?  California, where the prices were perhaps most out of control?  Nevada, where new construction was perhaps most out of control?

Try Mississippi, according to one unconventional measure.  It's called the "housing misery index."

Readers who are old enough might remember talk in the 1970s of the "misery index," a combination of the inflation and unemployment figures.  (Hey, we ought to bring that back, if only the government kept honest inflation and unemployment numbers.  Oh well…)  Now, Orange County Register real estate columnist John Lansner has come up with what he calls the "housing misery index" — a combination of the unemployment rate and the mortgage delinquency rate.

So by this measure, Mississippi, with an unemployment rate of 6% and a delinquency rate over 9% (!) is in the worst shape, followed by four Great Lakes states — Michigan (no big surprise), Ohio (ditto), Indiana, and Wisconsin.

California ranks 26th by this measure, Nevada 30th.

The states in the best shape are Idaho, Montana, and — taking the top spot — Hawaii.

It would be even more interesting to break down the figures by metro area instead of by state.  A quick review reveals the worst delinquency rate in the nation is Merced, California at 8.1%… where the unemployment rate is 8.4%.  I suspect the housing misery index might be even worse in El Centro, California and — right across the state line — Yuma, Arizona.  Unemployment there is in the 15-20% range, but I can't pin down delinquency figures.

But no matter where you are, the value of your own home is at risk.  By one calculation, it could be worth as much as 43% less just four years from now.  Details in this <special report.

(Hat tip to my beautiful bride for bringing this to my attention.)

The Daily Reckoning