Despite signs that the USA property market has improved across some parts of the States in recent months, a growing number of homeowners haven fallen into negative equity.
USA property website Zillow.com revealed that 23.3 per cent US homeowners were left with a mortgage debt that exceeded the value of their home in the first quarter of 2010, down from 21.5 per cent in the final quarter of 2009, posing a genuine threat to the housing market recovery.
Meanwhile, the average price of a home in USA depreciated by 3.8 per cent year-on-year in the first quarter and down one per cent compared to the preceding quarter, to $183,700 (£127,000), according to the Zillow Home Value Index.
“Several large California [property] markets have shown significant stabilisation in home values, marking what could be a bottom,” Stan Humphries, Zillow chief economist, told the press. “But most markets across the country remained in decline.'
On an annual basis, residential property values fell in 106 of the 135 metropolitan areas tracked by Zillow.
However, home values in a number of California metro areas - Los Angeles, San Diego, San Francisco, Santa Barbara and Ventura - have appreciated significantly in the past year or so.
The fact that the volume of USA homes coming onto the market is increasing is expected to place downward pressure on prices across many parts of the country over the next few months.
Humphries projects that property prices will bottom out in the third quarter of this year, and anticipates that values will remain stable for five years thereafter.