Are Home Prices Drowning?

Alec Foege

Underwater homes remain a growing problem and home prices are still falling, despite already having slid substantially.

The third quarter of 2010 registered a decline of 4.3 percent year-over-year and dropped 1.2 percent as compared to the same quarter last year, according to Zillow.com.

Underwater homes -- those with negative equity, when a home's mortgage is larger than its value -- grew to 23.2 percent of single-family homes carrying mortgages. The markets with highest percentage of underwater mortgages in the third quarter were Las Vegas (80.2 percent) and Phoenix (68.4 percent).

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