Home values stabilized significantly during the second half of 2009, with the total dollar value of U.S. homes increasing since June said Dr. Stan Humphries, Zillow’s chief economist.

According to Zillow, US homes lost $489 billion in home values during the first 11 months of 2009, significantly less than the $3.6 trillion lost during 2008, according to analysis of recent Zillow Real Estate Market Reports.

The stabilization in home values led to easing rates of negative equity in the third quarter of 2009, with 21 percent of all single-family homeowners with mortgages underwater, compared to 23 percent in the second quarter.

"Most housing markets across the country had a good summer, spurred largely by the government’s tax credits for homebuyers combined with very low mortgage rates,” said Humphries.

I’ve said that the reverse mortgage industry needs housing to bottom in order to grow, this is a good step in that direction.