11/10/2010: Nearly one-quarter, or 23.2 percent of U.S. homeowners with a mortgage, were underwater on the loan in the third quarter, meaning they owe more on the home than it is worth, according to figures released Wednesday by the real estate data provider Zillow.
The third-quarter underwater number rose from 22.5 percent in the second quarter and is the highest it’s been since Zillow began tracking negative equity in 2009. The subtle hints of stabilization in home values that started emerging earlier in the year began to wane last quarter.
With home values nationally 25 percent below their June 2006 peak, the current housing downturn is approaching Great Depression-era declines, when home values fell 25.9 percent in five years (between 1929 and 1933), Zillow pointed out in its report.
Home values fell from the second to the third quarter in 77 percent of markets covered in Zillow’s study. In five of those markets – the California metropolitan areas of Los Angeles, San Diego, San Francisco, San Jose, and Ventura – home values began to drop again after five consecutive quarters of increases.
Additionally, more than one-quarter (27.3 percent) of homes sold in September were sold for a loss, marking a near-peak level, Zillow reports. The peak was hit in February 2010, when 27.7 percent of homes sold went for a loss.
