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What We're Reading: The Good Friday edition
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More than 28% of US homeowners underwater on their mortgage

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Home values in the first quarter fell 3% from the prior quarter and are now nearly 30% lower than the June 2006 peak. Real estate data analytics firm Zillow said its home value index for the first three months of 2011 declined 8.2% from a year earlier to $169,600. The first-quarter decline was the steepest since 2008. Zillow now doesn't expect home values to reach bottom before 2012, "at the earliest." "Home value declines are currently equal to those we experienced during the darkest days of the housing recession," Zillow Chief Economist Stan Humphries said. "With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011. We did expect substantial payback from the homebuyer tax credits, which buoyed the housing market last year, but underlying 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." The level of single-family homeowners who owe more on their mortgage than the property is worth rose to a new high of 28.4% at March 31, up from 27% at the end of 2010, according to Zillow. Foreclosure rates rose during the first quarter as banks ended moratoriums related to last fall's robo-signing debacle. Zillow said one out of every 1,000 homes in the country was lost to foreclosure in March. Just three of the 132 markets Zillow tracks experienced home-value gains in the first quarter: Fort Myers, Fla., at 2.4%, Champaign-Urbana, Ill., at 0.8% and Honolulu, Hawaii, 0.3%. Home values in California, Florida and Nevada continued to slid through the first quarter, and a few Midwestern cities saw double-digit drops from a year earlier. (Click on chart to enlarge.) Write to Jason Philyaw.

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