by Calculated Risk on 4/07/2005 12:30:00 AM

In a new report, U.S. foreclosures are up 57% from March 2004.

"The hardest hit states: Ohio, Texas, Michigan and Georgia, with more than 2,300 new foreclosures each."

What is interesting is these are the non-bubble states according to an analysis by Richard J. DeKaser, Chief Economist at National City Corporation. Borrowers in these non-bubble states are getting in trouble first, probably because of job losses (their local economies are not as strong as the bubble states without the booming RE business) and they were not able to extract as much equity during the refinancing boom. The article cited higher interest rates and job losses:

Non-mortgage debt may help explain the troubling trend, [Marquette University economist David E. Clark] said. Most consumers opt for fixed-rate mortgages and thus are immune to rising interest rates, Clark noted. But their credit cards and home equity lines of credit carry variable interest rates - rates that have climbed in recent weeks.

"These (easy credit avenues) may have allowed people to get in rather dire straits financially, get overextended, and this is the final chapter of that process," Clark said.

Jim Houston, vice president with Foreclosure.com, said March's figures involve "the highest spike we've ever seen" in new foreclosures.

I am not surprised that the non-bubble states are seeing the impact of the housing slowdown first. But I think the real problem will start when the bubble states see a slowdown and a drop in transaction volumes.

UPDATE: Here is the foreclosure.com press release with numbers by state.