Almost one-third of those who bought homes in the U.S. in the last two years owe more than the home is worth, according to a housing market research firm.

The price of the average U.S. condominium fell 7.4 per cent year-over-year, Zillow said Tuesday in its quarterly home value report. The average single-family home lost 5.5 per cent of its value in 2007.

Adding in price declines in 2006, the firm says 30.4 per cent of those who made home purchases in 2006 and 2007 have negative equity.

By comparison, Zillow says only three per cent of those who bought in 2003 owe more than their homes are worth.

The report said the highest rates of negative equity are in areas that have had significant price declines and relatively low down payment requirements. It singled out parts of California, Florida, Arizona and Nevada.

In Las Vegas, for instance, more than half of those who bought in 2007 and almost three-quarters of those who purchased in 2006 are in a negative equity situation.

"With consecutive declines over the past five quarters, we haven't seen the housing market bottom yet, and it may very well get worse before things get better," said Stan Humphries, Zillow vice-president of data and analytics.

"Even many markets that have been largely insulated from recent declines, like some in the Pacific Northwest, reported notable value declines in the fourth quarter," he said.

The Zillow report is based on data on about 80 million homes.

White House announces foreclosure help

Negative equity makes it more likely that Americans will walk away from their mortgage obligations if they run into financial difficulty.

So the Bush administration on Tuesday announced a new program that would give many homeowners threatened with foreclosure a 30-day reprieve.

"Project Lifeline" is aimed at people who are at least 90 days overdue on their monthly mortgage payments. The program is the brainchild of six big American lenders who together account for almost half of the mortgages in the U.S.

Homeowners will get a chance to stop the foreclosure process for 30 days while lenders try to work out some way to make it easier for them to make their payments.

The Mortgage Bankers Association said at least 1.3 million home mortgage loans were either seriously delinquent or in foreclosure at the end of September.

With files form the Associated Press