Real estate data analyzer First American CoreLogic forecast a continuing rise in mortgage delinquency over the next six to 12 months as home prices decline and economic conditions remain difficult.

The Core Mortgage Risk Monitor (CMRM), an index of foreclosure risk monitored and assembled by CoreLogic, increased 16% in the first quarter of this year compared with the same period last year.

The index, which has increased over the last four quarterly reporting periods, is now 47% higher than its based period which was in the first quarter of 2002 when index was started, a period near the end of the last US economic recession.

An elevated Core Mortgage Risk Index signals the increased potential for financially disruptive and costly economic consequences for consumers, their local community, and mortgage financiers.

Nationwide, the markets with highest levels of delinquency risk also had double-digit drop in home prices and increasing unemployment.

"House price depreciation factors are now outweighing economic stress factors," said Mark Fleming, CoreLogic's chief economist.

Of the top 10 markets with the highest risk of delinquency, eight are in California and two are in Florida. Previously, markets in states like Michigan and Ohio, where the labor market has been weak, dominated the list of most delinquency-prone markets.

But rapidly declining home prices, particularly in places like California and Florida where speculative buying drove prices up during the housing boom, are causing a shift in the nation's mortgage delinquency trends.

CoreLogic forecasts delinquency-risk to be worst in California's Inland Empire region, where home price appreciation has declined more than 21%. Elsewhere in the golden state, the Los Angeles and Sacramento areas are considered high risk for delinquencies.

"High house price markets are now high risk markets," said Fleming.

Falling home prices have created a fierce series of events where lower prices lead to more defaults, resulting in excess inventory, which causes demand to fall further thus bringing further home home prices declines and again increasing defaults.

This has made the outlook for delinquencies worsen and affect the overall confidence of the homebuyers and investors on the economy as well as their personal wealth.

Reference: Corelogic's Core Mortgage Risk Monitor (CMRM),