Oct. 15 (Bloomberg) -- Bruce Dahlin lost his $50,000-a-year job as a graphic designer at the Young Electric Sign Co. in January. He says he has four months to find full-time work before losing his four-bedroom Las Vegas house to foreclosure.

“It’s been rough,” Dahlin, 59, said in a phone call earlier this week. “I’m living day by day. If I don’t get hired full-time, that’s it.”

Nevada’s 13 percent unemployment rate and declining population growth are contributing to a foreclosure level that’s been the highest in the U.S. for more than two years. Rising joblessness is making it harder for borrowers to meet mortgage payments, and a slowing flow of new residents into the state is shrinking the pool of potential homebuyers, said economistKeith Schwer from the University of Nevada, Las Vegas.

“The loss of population is exacerbating the problem because there are fewer people here to buy stuff,” Schwer said. “One should never bet against Las Vegas or Nevada, but we won’t have the rapid growth we’ve had in the past. We’re no longer the boom area that we were in the last 20 years.”

Nevada had the worst foreclosure rate of any state in the third quarter, with one in 23 households receiving a foreclosure filing, Irvine, California-based RealtyTrac Inc. reported today. The rate, almost six times the national average, is ahead of Arizona, California and Florida, and shows no sign of slowing, said Rick Sharga, the company’s senior vice president.

Domino’s Deliveries

“The economy is affecting everyone it seems,” said Dahlin, whose lender, Wells Fargo & Co., agreed to reduce his $1,114 monthly mortgage payment by half until February while he looks for full-time work. Dahlin said he has applied for 60 jobs, earned just $2,000 from freelance work, and isn’t ruling out the prospect of delivering for Domino’s Pizza.

“I always try to think positive, but I can’t tell you what’s going to happen,” he said.

Nevada’s unemployment rate reached 13 percent in August, up from 7 percent a year earlier and the highest since record keeping began in 1976, according to the state employment department. It hit a low of 4.2 percent during 2006, when the median price for a single-family home in the Las Vegas area peaked at $315,000.

The state’s most populated region, the Las Vegas area, needs 126,000 new jobs to bring unemployment down by half and reduce residential vacancy rates, according to Jeremy Aguero, principal analyst at the Las Vegas-based advisory firm Applied Analysis. He estimates Southern Nevada, with a population of 1.85 million people, has lost 19,700 residents in the past year.

Fast-Growing State

An abundance of jobs and affordable housing had turned Nevada into the fastest-growing state for much of the past 20 years. From 1990 to 2008, its population more than doubled to 2.6 million, compared with a 22 percent increase nationwide.

Now the lack of jobs appears to be keeping people away. The number of out-of-state drivers turning in licenses for Nevada- issued ones between January and September was 49,946, down 13 percent from the same period in 2007 before the U.S. recession began, according to figures from the Nevada Department of Motor Vehicles.

While the state demographer’s office expects the population to continue rising through 2028, the rate of growth will be below that of the past two decades.

William Anderson, chief economist of the Nevada Department of Employment, Training and Rehabilitation, expects unemployment to continue climbing to 14.4 percent next year before dropping to 12.8 percent in 2011. “As of right now, we have yet to see light at the end of the tunnel,” he said.

Falling Prices

Rising foreclosures are expanding the supply of housing units on the market, pushing prices down further, and widening the pool of borrowers who owe more than their properties are worth, Schwer said, adding he expects to see no improvement until at least 2012.

Sixty-nine percent of all properties with a mortgage in Las Vegas and the nearby suburb of Paradise are worth less than the amount owed on them, compared with 32 percent nationwide, based on the most recent figures from real estate data company First American CoreLogic Inc. in Santa Ana, California.

The median price of a single-family home in Las Vegas dropped 29 percent to $138,000 in September from a year earlier, according to the Greater Las Vegas Association of Realtors. At the same time, sales of those homes rose almost 21 percent from a year earlier, partly because of federal tax-credits for first- time buyers, the group said.

‘Years, Not Months’

“Rising sales are one sign that we’ll approach some type of bottom over the next year,” said Aguero of Applied Analysis. “Even so, the solution to our problem is going to be in creating jobs. This recovery will be measured in years, not months.”

Dee Montano, a 45-year-old substitute teacher, said her family was pushed to the brink of foreclosure in September after her husband lost his job as a construction superintendent and the couple missed four months of payments on a $320,000 mortgage.

“Honestly, I don’t see the economy making a quick rebound anytime soon,” she said. “Everybody is holding their breath, waiting for the worst to happen.”

To contact the reporter on this story: Vivien Lou Chen in San Francisco at vchen1@bloomberg.net

Last Updated: October 15, 2009 12:19 EDT