Depression-Era Depreciation Nears

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% 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.

Zillow’s home value index recorded a 4.3 percent year-over-year decline in Q3 and was down 1.2 percent from the second quarter. The Seattle-based company says its index reading has fallen for 17 consecutive quarters now. The company’s market data shows the median home value nationwide has dropped to $179,900.

With home values nationally 25% 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).

Source: DSNews