“Underwater mortgages” – loans with borrowers who owe more than the value of their homes – climbed in the first quarter of 2010, with 23.3 percent of single-family homes in negative equity, according the real estate data site Zillow.com.
That figure is up from 21.4 percent in the fourth quarter.
In addition, home values in most U.S. markets continued to decline in the first quarter as the Zillow Home Value Index fell 3.8 percent from a year ago, or 1 percent from the previous quarter, to $183,700.
Nonetheless, Zillow saw a positive in its findings.
Home values in several large California markets – including Los Angeles, San Diego, San Francisco, Santa Barbara and Ventura – “have stabilized significantly in the past year, marking what may be a bottom,” Zillow said.
“It’s a very positive sign that several large markets have hit what appears to be a tentative bottom in home values,” said Zillow Chief Economist Dr. Stan Humphries. “While this is no guarantee that home values there will not fall again, it is more likely than not that they will remain above their lowest point last year.
California’s saw only a 0.7 percent decline on Zillow’s Home Value Index to $332,900, but other states did not fare as well. Florida was hit with a 12.3 percent decline on the index, with a home value of $134,700 value.
Other troubling factors remain. The homebuyer tax credits expired on April 30 “stealing demand from later this summer, rather than creating new demand,” Humphries said.
Zillow projects that home values are more likely to reach bottom in the third quarter of 2010.
Foreclosure re-sales – mostly the sale of homes foreclosed on in the previous 12 months – remained elevated in March, representing 22.2 percent of all U.S. home sales.
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