U.S. home-value decline far worse than in 2009 [View All]

[Newsjock]

Source: Bloomberg News

U.S. home values are poised to drop by more than $1.7 trillion this year amid rising foreclosures and the expiration of home-buyer tax credits, said Zillow Inc., a closely held provider of home price data.

This year's estimated decline, more than the $1.05 trillion drop in 2009, brings the loss since the June 2006 home-price peak to $9 trillion, the company said Thursday.

The drop pushed more buyers underwater, meaning they owe more on their mortgages than their homes are worth, Zillow said. The percentage of homeowners with so-called negative equity reached 23.2 percent in the third quarter, up from 21.8 percent at the end of 2009.

... Zillow's report is similar to other forecasts for prolonged weakness in the U.S. housing market. U.S. home prices will decline as much as 11 percent by 2012 as weak demand and rising inventory extend the housing slump, Morgan Stanley said in a report Wednesday.

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