Home values remain flat in third quarter

Zillow's Real Estate Market report for the third quarter found home values in the United States declined only 0.2 percent, and the Home Value Index dropped 4.4 percent compared to the same quarter in 2010. The flat home values in the third quarter resulted in a rise of negative equity, as 28.6 percent of single-family homeowners with mortgages underwater, up from 26.8 percent in the second quarter.

"We're clearly dealing with a crisis of confidence that is keeping potential buyers on the sidelines, fueled largely by high unemployment and more general economic uncertainty," said Dr. Stan Humphries, chief economist at Zillow. "That said, given the steady drumbeat of recent negative economic news, home values held up better than would be expected."

To protect against declining home values, many homeowners are turning to home value insurance. Fox Business reported that the insurance is only beneficial to homeowners who plan to stay in their homes for a long time, or if the market has bottomed out and values have nowhere to go but up.

"You are spending money to insure against something that may never happen," Justin Krane, a certified financial planner, told the news source. "On the other hand, some people intend to stay in a house for 10 years but end up selling earlier than expected. Peace of mind is worth a lot. It all boils down to the premium."

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