After declining between the first and second quarters of this year, Zillow says negative equity rose again in the third, reclaiming all of the previous quarter’s decline and then some.

Zillow’s latest market analysis indicates 28.6 percent of American homeowners with a mortgage owed more on the loan than their home was worth as of the end of September. That’s up from 26.8 percent in the second quarter and 28.4 percent in the first quarter.

Dr. Stan Humphries, Zillow’s chief economist, explains that negative equity fell in the second quarter on the basis of sharp improvements in depreciation rates and flat foreclosure liquidation rates.

This quarter, however, Humphries points out that home values remained relatively flat while foreclosure rates slowed further. These two factors, he says, combined to increase negative equity.

While the pace of foreclosures has slowed, Zillow still describes liquidations as “high,” with nearly 9 out of every 10,000 homes going back to the bank through foreclosure.

Zillow’s third-quarter report shows that despite recent economic turmoil, home values in the United States remained almost unchanged from the second to the third quarters, declining just 0.2 percent.

Regionally, 105 out of 157 markets (67 percent) in Zillow’s study experienced quarterly declines. Only 26 markets saw appreciation on a quarterly basis.

Several markets, including Washington, D.C. and Fort Myers, Florida, saw declines in the third quarter after two consecutive quarters in positive territory.

However, Zillow says there are signs of stabilization in some of the hardest hit markets in Michigan. Ann Arbor, Grand Rapids, Detroit, and Lansing have all seen at least two quarters of appreciation.

The company’s national index is down 4.4 percent from the third quarter of 2010, registering a median home value of $171,500. Zillow says residential property values have fallen 28.8 percent since they peaked in June 2006.

With the steady drumbeat of negative economic news recently, Humphries says home values are holding up better than one might think.

Still, Humphries is sticking to his prediction that a true bottom in home values shouldn’t be expected until 2012 at the earliest, with negative equity and unemployment the two biggest factors preventing the market from stabilizing.