Michigan Foreclosures Reflected Highest Unemployment Rate

by Simon Lindsay on States

Record Michigan foreclosures in 2009 reflected the dire unemployment situation in the state. In December, Michigan again posted the highest state unemployment rate – 14.6 percent – far above the jobless rate of the second-ranking state, which is Nevada with 13 percent, and the nationwide rate of 10 percent.

Michigan’s unemployment rate has been the highest in the country over the last four years, based on data from the U.S. Bureau of Labor Statistics.

Michigan also had the fourth-highest rate of increase in jobless rate from December 2008. The state posted a 4.4-percent increase, following Nevada, West Virginia and Alabama, which also posted more than four-percent increases.

Michigan lost a total of 15,700 jobs in December last year compared to the previous month and lost a staggering total of 207,100 jobs in 2009 compared to 2008.

In a foreclosure study made by a California real estate firm, Michigan ranked eighth among states in 2009, with 118,302 or 2.61 percent of its homeowners battling foreclosure. The 2009 filings marked an 11.5-percent increase from 2008 and a 35.7-percent increase from 2007.

In the 2008 foreclosure chart compiled by the same real estate firm, the pace of Michigan foreclosures ranked sixth among states, with 106,058 or 2.4 of households in the state notified of delinquency or foreclosure.

The intertwining of job losses and record numbers of repo homes for sale is well-illustrated in the case of Michigan, which lost thousands of jobs and homes after the auto manufacturing industry collapsed in the earlier part of 2009.

Over 100,000 auto manufacturing jobs were lost when Chrysler LLC and General Motors Corporation went into bankruptcy last year, pushing the Michigan jobless rate to its peak of 15.3 percent in September last year and driving thousands of houses into listings of banks foreclosure homes.

As much of the job losses occurred in the first months of 2009, the 33,000-per-month job loss pace slowed down to about 2,000-per-month in the latter part of the year.

In November, the jobless rate was down to 14.7 percent, and in December, it went down further to 14.6 percent, but still the highest state rate in the U.S.

According to economists at the University of Michigan, the drop in the jobless rate was caused in part by the record number of people who have left Michigan – about 72,000 workers who have moved to escape the devastation caused by record job losses and Michigan foreclosures.