Zillow index: accelerating real estate price declines

28% of homes with mortgages are underwater

An index maintained by listings and valuation portal Zillow.com shows U.S. home-price declines accelerating during the first three months of 2011 to post a cumulative drop of 8.2 percent from a year ago that left more than one in four homes with a mortgage underwater.

A 3 percent decline in the Zillow Home Value Index from the fourth quarter left 28.4 percent of homes with mortgages worth less than the amount of the loan they were purchased with, Zillow said, up from 27 percent during the last three months of 2010.

It was the steepest quarterly decline in the index since the fourth quarter of 2008, prompting Zillow to push back its forecast for a bottom in home prices to 2012 at the earliest.

Zillow said foreclosure sales were on the rise in the first three months of the year as loan servicers lifted moratoriums.

"Home-value declines are currently equal to those we experienced during the darkest days of the housing recession," said Zillow’s chief economist, Stan Humphries, in a statement. "With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011."