Officials say we're not out of the woods yet.

Minnesota's foreclosure crisis is easing after eight long years.

House prices are rising and the number of foreclosures is falling. And the latest sign is that the number of Twin Cities homes lost to foreclosure fell by nearly half in January compared with a year ago, according to the research firm CoreLogic, the Star Tribune reported Thursday ( ).

The crisis peaked statewide in 2008 when there were 26,000 foreclosures, compared with just 6,000 in 2005. Last year, there were about 11,800 foreclosures across Minnesota.

"We saw an incredible drop," said Julie Gugin, executive director of the Minnesota Homeownership Center, which provides financial counseling across the state. "We're definitely heading in the right direction."

But it's difficult to say when foreclosures will recede all the way to their pre-crisis lows. Many families earn less than they did five years ago, and thousands of homeowners will never regain the equity they lost when house prices crashed. And there are still broad swaths of the state where thousands of homeowners are struggling.

"Homeowners are not out of the woods quite yet," said Colleen Hernandez, chief executive officer of the Homeownership Preservation Foundation, a Minnesota-based organization that provides financial counseling nationwide. While call centers nationwide are taking far fewer inquiries from those already in default, she said, more are coming from struggling people who are current on their payments but on the verge of falling behind.

They're particularly struggling on or just beyond the fringes of the Twin Cities metro area where jobs are harder to find and house prices have risen the least.

Homeowners in Isanti County have struggled the most. There, the foreclosure rate stood at 1.26 percent, double the statewide average. The same was true in Chisago and Stearns counties, where hundreds of cheaper houses were built for budget-conscious home buyers who often have long, expensive commutes to work.

"It will be difficult to declare when the new normal has arrived, because the industry has changed," said Mike Haley, assistant commissioner at the Minnesota Housing Finance Agency. "But there's a lot to feel good about."