Home Values Set to Shed $2 Trillion This Year

In a report released Monday, Zillow tallies up the collective home-equity hit that Americans will take this year:

U.S. homes are set to lose well over $2 trillion in value during 2008, according to analysis of recent Zillow Real Estate Market Reports. Home values declined 8.4 percent year-over-year during the first three quarters of this year, compared to the same period in 2007.

“Underwater” was the real estate buzzword of the year. U.S. home values lost $1.9 trillion from the first of the year through the end of the third quarter, and were likely to fall further in the fourth quarter, leaving approximately 11.7 million American households owing more on their mortgage than their homes are worth. One in seven of all homeowners (14.3 percent) were underwater by the end of the third quarter.