The mortgage industry in the US, which triggered the economic turmoil globally, saw homeowners in the US collectively losing $3.3 trillion of their property value last year with $1.4 trillion or 42 per cent of the annual total being lost in the last quarter alone.

With more than 34.6 per cent of homes being sold at a loss last year, the percentage shot up by 30.2 per cent for the 12 months ending Q3 2008 and one in six or 17.6 per cent of all mortgage homeowners will end up paying more than the actual value of their homes, according to independent real estate service provider Zillow.com.

Since the US economy contracted at 3.8 per cent annual pace, the worst since 1982, more than 2.3 million properties went into default or ended up being seized by lenders last year.

As financial institution in the US lent money even to borrowers who were considered risky, one in five or 19.9 per cent of all mortgages in 2008 ended in foreclosures, which was an 18.6 per cent increase from the third quarter, thereby pushing the prices of properties even further down.

According to Zillow.com, the foreclosure numbers may not be accurate as nearly 10.9 per cent of all property transactions conducted in US last year were short sales where the lender took much less than what was owed in the mortgage to avoid the lengthy time and cost consuming procedure of foreclosure.

Adding to the housing and mortgage crisis was the 2.6 million Americans who lost their jobs last year as unemployment peaked to 7.2 per cent in December making homeowners default on their mortgages as income dried up.

This month, the Commerce Department said that the era of new home constructions had come to an end as it dropped over 15 per cent in December 2008, to a seasonally adjusted annual rate of 550,000, making it the lowest on record.

The department also said that permits to build single-family homes also dropped 12.3 per cent to 363,000 in December. Total permits including apartments dropped 10.7 per cent to a 549,000 annual rate, with the numbers representing record lows for both single-family and total permits.

Manhattan one of the most costly places to buy property in the US, the estimated median price dropped 5.8 per cent to $914,544, as the past six month saw financial sector jobs being put at the slaughter house due to the upheaval at Wall Street.

The Zillow report shows that out of the 161 metropolitan areas it conducted the survey, nearly 90 per cent of them had their values falling in the fourth quarter last year, including the stable areas of Rochester, New York and Winston-Salem, North Carolina.

The US President's residence, the White House was not spared either as Zillow said that it lost more than $23 million in value compared to last year, if the White House were actually a home that could be bought and sold. (See: White House value falls $23 million after housing market crash)