Nearly a third of recent homebuyers have negative equity

I knew things were bad, but I didn't realize it was quite this bad.

According to a report released today by real estate portal Zillow, nearly a third of U.S. homebuyers who purchased a property in the last two years now owe more than the home is worth.A whopping 30.4 percent of those who purchased homes in 2006 and 2007 have negative equity, largely because single-family homes posted a year-over-year decline of 5.5 percent, while condos slid a record 7.4 percent.

To highlight the severity of the problem, only three percent of those who purchased a home in 2003 currently owe more than their homes are worth.

Homeowners were hit hardest in areas like California, Florida, Arizona, and Nevada, where home prices saw the worst declines and borrowers put little to nothing down.

Read more.