The company said 31.4 percent of U.S. homeowners were "underwater," which is the trade term describing homes for which the value has fallen below what is owed the lender for the property.
"Negative equity remained high despite increasing home values in the latter part of the first quarter," Zillow said, pointing to "a slower pace of foreclosures after the robo-signing issues of 2010," as part of the reason the underwater rate has remained stubbornly high.
In contrast to previous years, in which many homeowners walked away from mortgage commitments to avoid monthly payments on a losing proposition, homeowners now appear willing to stick it out, Zillow said.
"Despite the high rate of negative equity, the majority of underwater homeowners are current on their mortgages. Nine in 10 continue to make their mortgage and home loan payments on time, with just 10.1 percent of underwater homeowners more than 90 days delinquent," Zillow reported.
While that could be explained by rising hope that home values could be turning higher, for the moment, at least, "many homeowners in negative equity are not deeply underwater," Zillow said.
Nearly 40 percent of underwater homeowners owe 1 percent to 20 percent more than their homes are worth, Zillow said.