To better understand the current state of the American housing market — and better forecast its future — experts look at a number of economic and financial indicators. Different statistics, such as the size of the market of foreclosed homes, home prices and home inventories, touch on some of the reasons people default on their mortgages and banks end up writing off bad loans. But none is a better indicator than the percentage of mortgages that are underwater – where borrowers owe more on their mortgages than their homes are worth – and the major reason people default on mortgages.

Indeed, real estate research firm Corelogic recently released data on underwater mortgages, breaking down the information by state and major city. And according to the latest Corelogic data, “10.9 million, or 22.7 percent, of all residential properties with a mortgage were in negative equity at the end of the first quarter of 2011.”

• Read: The States Where Underwater Mortgages Are Sinking Home Values

Corelogic also posted numbers for mortgages that are within 5% of being underwater. These are valuable numbers in combination. Homes with mortgages that are nearly underwater can trigger problems when they are sold. Bank, legal, and closing costs alone can wipe out a 5% equity stake, particularly in the sale of inexpensive homes.

24/7 Wall St. analyzed this data to see which state has the greatest problems. We then added figures on home vacancy rates from the federal government, median home values, foreclosure rates, and state unemployment. Taken as a whole, these numbers create a clear picture of the broad real estate market in each state and the effects it has one the wider economy.

The underwater mortgage problem will probably deteriorate before it improves. Home inventory level is still at an extraordinary high. The Wall Street Journal reports that it would take 103 months to “sell off all the foreclosed homes in banks’ possession, plus all the homes likely to end up there over the next couple years, at the current rate of sales.” The size of that excess inventory, in addition to homes that are for sale under normal circumstance, should keep home prices low for several years. That leaves people with mortgages greater than the value of their homes trapped in a financial vice. And in the following ten states, people are feeling it the most.