With continued strength in the job market and solid gains in house prices, there has been a meaningful drop in mortgage delinquencies and foreclosures in the U.S. Steady employment gains mean most Americans are able to meet their mortgage obligations, while house price gains have helped reduce the number of underwater mortgages – leading to lower default rates and a healthy outlook for the housing market in the next year, according to the latest housing market barometer released today by Nationwide, a leading insurance and financial services organization.

The forward-looking Health of Housing Markets Report evaluates the housing health for the U.S. and 400 metropolitan statistical areas. This quarter's HoHM Report shows serious delinquency rates in nearly all MSAs are trending down toward pre-housing bust levels. As mortgage market conditions steadily improve, housing is expected to remain a bright spot in the U.S. economy.

Movements in serious delinquencies – defined as homes in foreclosures plus greater than 90-day delinquencies – serve as a leading indicator for overall housing market health among buyers, sellers, and builders. Falling rates across the country bode well for continued health and sustainability throughout most housing markets in the U.S. over the next year.

"We are seeing positive signals for homeowners, as well as local economies, in most metro areas," said David W. Berson, Nationwide's senior vice president and chief economist. "The drop in serious mortgage delinquency rates supports sustainable home price gains and housing activity. The more sustainable housing markets should allow for positive feedback loops in local economies, with strengthening job and income gains for residential real estate agents, mortgage bankers and home improvement workers."

The report also indicates that:

• The vast majority of metro areas across the country are healthy, indicating that few regional housing markets are vulnerable to a housing downturn in the near term – except those in energy-intensive regions or where house price gains are substantially above long-term trends.

• The energy sector slowdown is weighing heavily on job growth and housing sustainability in certain areas, including portions of Texas, North Dakota, Wyoming and Louisiana. MSAs in these states comprise the entire bottom 10 performance rankings list.

• Texas is among the least sustainable states in the country right now, with nearly all MSAs rated as negative or neutral due to oil price declines or overheated markets.

• Major MSAs within the top 50 include: Oklahoma City, Okla., Cleveland, Milwaukee and Chicago; meanwhile, three of the top 40 MSAs by size lie just outside the bottom 10: Houston, Seattle and New Orleans.

The Top 10 MSAs in the index are, in order: Harrisburg-Carlisle, Pa.; Saginaw, Mich.; Lansing-East Lansing, Mich.; Memphis, Tenn.-Miss-Ark.; Manhattan, Kan.; California-Lexington Park, Md.; Bloomsburg-Berwick, Pa.; Macon, Ga.; Midland, Mich.; Baltimore-Columbia-Towson, Md.

The Bottom 10 MSAs, in order, are: Bismarck, N.D.; Casper, Wyo.; San Angelo, Texas; Midland, Texas; Austin-Round Rock, Texas; Waco, Texas; Laredo, Texas; College Station-Bryan, Texas; Dallas-Plano-Irving, Texas; Victoria, Texas

Showing the most improvement in the past year, in order, are: Manhattan, Kan.; Ithaca, N.Y.; Monroe, La.; Roanoke, Va.; Texarkana, Texas-Ark.; Bloomsburg-Berwick, Pa.; California-Lexington Park, Md.; Ocean City, N.J.; Kingston, N.Y.; Alexandria, La.

Weakening the most in the past year, in order, are: Casper, Wyo.; Midland, Texas; Grand Forks, N.D.-Minn.; Lawton, Okla.; Waco, Texas; Peoria, Ill.; College Station-Bryan, Texas; Omaha-Council Bluffs, Neb.-Iowa; Bloomington, Ill.; Anchorage, Alaska