States in the lightest shades of red have more “deeply underwater” foreclosures than not. (Data unavailable for some states.)

The housing market may be slowly improving, but weak spots remain. In at least 14 states, the share of “deeply underwater” foreclosures is larger than those with equity, according to housing data analyst RealtyTrac.

But, overall, the December data show those deeply underwater foreclosures declining and homes rich in equity increasing.

“During the housing downturn we saw a downward spiral of falling home prices resulting in rising negative equity, which in turn put millions of homeowners at higher risk for foreclosure when they encountered a trigger event such as job loss,” Daren Blomquist, vice president at RealtyTrac, said in a statement. “Now we are seeing the reverse trend: rising home prices resulting in falling negative equity, which in turn is giving millions of homeowners a lifeline to avoid foreclosure.”

A sign showing a foreclosure home in Texas for sale in August 2006. (Credit: David J. Phillip/Associated Press.) (David J. Phillip/AP)

The data measure underwater status by comparing the value of a home loan to the value of the home itself. A foreclosure was defined as “deeply underwater” when the homeowner owed at least 25 percent more than the value of the property. (The loan-to-value was 125 percent or greater.) A foreclosure with equity was defined as one where the value of the loan was equal to or smaller than the value of the home. (A loan-to-value ratio of 100 percent or less.)

The states with the highest percentage of deeply underwater foreclosures were: Nevada (65 percent of foreclosures were deeply underwater), Florida (61 percent), Illinois (61 percent), Michigan (55 percent), and Ohio (48 percent).

But that data is just for those homes in foreclosure. In two states especially hard-hit by the housing crisis, Nevada and Florida, “deeply underwater” properties accounted for more than one in every three homes.

States with the most equity-rich homes — where the loan value was well below the value of the home — included Hawaii (36 percent), New York (33 percent), California (26 percent), Montana (24 percent), and Maine (24 percent). D.C. also had a rate of 24 percent.