Tue Feb 12, 9:48 AM ET
More than 30 percent of U.S. homeowners who bought in the last two years owe more on their mortgage than their house is currently worth, a housing market research company said on Tuesday.
The housing market peaked in most U.S. markets in the last two years. Of home buyers in 2006, 39 percent of those with a median 10 percent down payment now have negative home equity similar to 30 percent of those who purchased in 2007, said online company Zillow in its quarterly home value report.
Overall, only 3 percent of those who purchased in 2003, and less than 1 percent of all homes in the United States regardless of when they were purchased, have negative equity. At the same time, U.S. home prices fell 3 percent last year from 2006. Condos and single-family residence values dropped 7.4 percent and 5.5 percent, respectively, the report said.
Nationwide in last three months of 2007, all home types fell 3.3 percent from the third quarter and 3 percent year-over-year. "With consecutive declines over the past five quarters, we haven't seen the housing market bottom yet, and it may very well get worse before things get better," said Stan Humphries, Zillow vice president of data and analytics.
"Even many markets that have been largely insulated from recent declines, like some in the Pacific Northwest, reported notable value declines in the fourth quarter," he added. Home values overall fell in the fourth quarter of 2007, to around $224,890, while condominiums posted the largest year-over-year drop, down 7.4 percent to around $229,017.
The fourth-quarter Zillow report taps data for the nation and 125 metro markets, covering 67 million homes. (Reporting by Chris Sanders; Editing by Jonathan Oatis)