Home values in the United States fell faster in the first quarter of 2011 than they have in any quarter since 2008, when the housing market experienced its worst performance, according to a new report from ""Zillow"":http://www.zillow.com.
[IMAGE]The Seattle-based company's index of residential property values fell 3 percent nationally during the first three months of this year when compared to the fourth quarter of 2010.
As a result, negative equity hit a new high-water mark by the end of the first quarter, with 28.4 percent of homeowners with mortgages owing more on the loan than their home is worth, Zillow said. The company's underwater ratio is up from 27 percent in the fourth quarter of 2010.
Zillow's first-quarter index reading of home values came in at $169,600, 8.2 percent below where it was a year earlier. The company says home values have fallen 29.5 percent since they peaked in June 2006.
Meanwhile, foreclosures rose throughout the first quarter as banks unfroze moratoriums and allowed foreclosures to resume. Foreclosures had fallen in late 2010 due to the
[COLUMN_BREAK]slew of temporary suspensions brought about by the ""robo-signing"" controversy.
But by March, Zillow says activity had picked up once again, with one out of every 1,000 homes in the country lost to foreclosure during the month.
With the substantial home value declines, as well as increasing negative equity and foreclosures, Zillow says it is unlikely that home values will reach a bottom in 2011.
First-quarter data has prompted Zillow to revise its forecast, now predicting a bottom in 2012 ""at the earliest.""
""Home value declines are currently equal to those we experienced during the darkest days of the housing recession,"" said Dr. Stan Humphries, chief economist for Zillow. ""With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011.""
Humphries says he did expect a ""substantial payback"" from the federal government's homebuyer tax credit initiative, which buoyed the housing market last year. But he warns that diminished demand post-tax credit, as well as rising foreclosures and high negative equity rates ""make it almost certain that we won't see a bottom in home values until 2012 or later.""
Zillow says very few markets were exempt from home value declines in the first quarter. Ninety-seven percent of the 132 markets covered by Zillow logged home value declines.
Only the Fort Myers, Flordia; Champaign-Urbana, Illinois; and Honolulu, Hawaii metro areas experienced quarterly increases, with home values rising 2.4 percent, 0.8 percent, and 0.3 percent, respectively. Home values in the Sarasota, Florida metro remained flat.