Percentage of homes with negative equity declines

The percent of single-family homes with negative equity declined 21 percent in the third quarter, down from 23 percent in the second quarter, as home values stabilized in the short term and a greater number of underwater homeowners lost their homes to foreclosure, according to the third quarter Zillow Real Estate Market Reports.

Year-to-year home values declined 6.9 percent in the third quarter, the 11th consecutive quarter of year-to-year declines, according to the Zillow Home Value Index.  However, the rate of year-to-year decline shrank for the third consecutive quarter.

Foreclosure resales remained high, accounting for 21.4 percent of all U.S. home sales in September, and represented the majority of sales in several MSAs including Merced, Calif., 74.2 percent; Stockton, Calif., 69.3 percent; Madera, Calif., 68.7 percent; and El Centro, Calif., 68.1 percent.  Additionally, 26.9 percent of home sales nationwide sold for less than what the seller originally paid, according to the report.

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