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updated 12/13/2010 1:25:04 PM ET 2010-12-13T18:25:04

The number of U.S. homeowners who owe more than their houses are worth fell for the third straight quarter this summer.

About 10.8 million households, or 22.5 percent of all mortgaged homes, were "underwater" in the July-September quarter, housing data firm CoreLogic said Monday. That's down from 23 percent, or 11 million households, in the second quarter.

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The decline came mainly because more homes had fallen into foreclosure and not because home prices had increased.

In a healthy housing market, about 5 percent of homeowners with a mortgage owe more than their homes are worth, CoreLogic's economist Sam Khatar estimates. The firm does not have historical data before the third quarter of 2009.

The ranks of "underwater" borrowers will remain high and likely rise because home values are expected to fall through the middle of next year. About 2.4 million hold only 5 percent or less equity in their homes, putting them near the tipping point if prices in their area fall.

Two-thirds of homeowners in Nevada who have a mortgage had negative home equity, the worst in the U.S. It was followed by Arizona, Florida, Michigan and California.

The total amount of negative equity decreased to $744 billion nationwide, down from $766 billion in the previous quarter.

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Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.94%
$30K home equity loan FICO 5.19%
$75K home equity loan FICO 4.58%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.40%
13.40%
Cash Back Cards 17.92%
17.91%
Rewards Cards 17.12%
17.11%
Source: Bankrate.com