Number of homes substantially underwater dropped in fourth quarter IRVINE, Calif., Jan. 9 (UPI) -- The number of U.S. homes substantially undervalued compared to their mortgages is trending lower, a private real estate firm said. Nearly one in five U.S. properties,19 percent, were worth at least 25 percent less than than their mortgage loans in December, online real estate market and industry research firm RealtyTrac said Thursday. But the total of 9.3 million homes that were considered deeply underwater, meaning the amount owed to the lender was substantially larger than the value of the property, was down sharply from 10.7 million or 23 percent of properties in September that were deeply underwater. RealtyTrac defines as properties with a gap of 25 percent or more between market value and loan values as being underwater. It said 48 percent of properties involved in foreclosure were deeply underwater in December, which was also a drop from September. In September, 299,773 properties involved in a foreclosure process were deeply underwater. By December, that had dropped to 239,470, RealtyTrac said. "During the housing downturn we saw a downward spiral of falling home prices resulting in rising negative equity, which in turn put millions of homeowners at higher risk for foreclosure when they encountered a trigger event such as job loss," said Daren Blomquist, vice president at RealtyTrac in a statement. "Now we are seeing the reverse trend: rising home prices resulting in falling negative equity, which in turn is giving millions of homeowners a lifeline to avoid foreclosure when they encounter a trigger event," he said. The flip side of homes deeply underwater is homes in which equity is building up to the point where they become equity-rich, which allows for more homes to go on the market, as they will make the owners a profit, or allows for home equity loans to flourish, which can boost the economy due to increased consumer spending. In the fourth quarter of 2013, properties with at least 50 percent equity -- considered equity-rich properties -- rose from 7.4 million or 16 percent of all properties, to 9.1 million or 18 percent, RealtyTrac said.