According to Zillow.com, during the forth quarter more than one firth of homeowners in the U.S owes more on their homes than what the property values.

Zillow.com reported 21.4 percent of homeowners are underwater with their mortgages. The percentage of homeowners underwater increased from 21 percent in the last three month but it is down from 23 percent during the second quarter. In December, more than one in 1,000 homes become bank owned properties.

Experts believe underwater mortgages would more likely become bank owned properties since homeowners have a hard time selling or refinancing the property.

During the forth quarter, home values decreased by 5 percent compared to a year earlier.

“While the next few months are likely to bring further home value declines in most markets, we do expect to see a national bottom in home prices by the middle of this year,” Zillow Chief Economist Stan Humphries said in a statement. “Thereafter, home values are likely to bounce along the bottom with real appreciation remaining negligible for some time.”

According to RealtyTrac Inc, during 2009, 2.82 million homes went into foreclosure. RealtyTrac predicts in 2010 the number of homes in foreclosure will rise to about 3 million.

According to Zillow.com, sold foreclosed properties made up 5 percent of the U.S home sales in December. In California, sold foreclosed homes made up 68 percent of sales and 64 percent in Las Vegas.

Zillow reported 29 percent of the homes sold in the U.S were sold for less than what the owner had paid.