"Although the housing market is beginning to take stronger steps toward recovery, it continues to be weighed down by a massive amount of mortgage debt that is holding many homeowners hostage in homes that are worth less than what is owed on the mortgage," said Daren Blomquist, vice president of online foreclosure marketplace RealtyTrac. "This is contributing to a shortage of inventory available for sale in the market, which is hobbling a recovery in the housing market and, by extension, in the overall economy. Until rising home prices ... help recalibrate the ratio of mortgage debt to home values, we can't declare a fundamentally sound housing recovery."
RealtyTrac broke down the 10 states with the most mortgage debt and the 10 states with the least, which you can see in the gallery below. "Of biggest concern are those states where total mortgage debt exceeds the total value of homes with a mortgage," Blomquist said. "When the cumulative equity for a state is negative, there are still foundational fissures threatening the health of that state's housing market -- even if there are positive signs of strength above the surface."
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