According to the latest Real Estate Market Report of listing service Zillow, home values are still on the way down in much of the U.S. Blaming foreclosure moratoriums for some of the negativity in Q410, Zillow reported that 27 percent of  US mortgaged homes were underwater at the end of the year, up from 23.2 percent the prior quarter.

“While the [ home buyer] tax credits did not hurt the housing market, they did delay its bottom by interrupting the housing correction that was taking place,” said Dr. Stan Humphries, Zillow chief economist, in the report. “Home value trends in the fourth quarter remained grim, but the good news is that these declines, while painful in the short-term, mean we’re getting closer to the bottom. The housing recession is likely in its death throes, and we expect to see sales pick up in early 2011. That will lead the way to home values stabilizing and an eventual bottom later this year, although it will take several months of increased sales activity before values begin to respond.”

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