The Pulse dropped today on news that 28 percent of Americans are currently underwater on their homes. That’s up from 22 percent just a year ago, according to research by Zillow Inc., a Seattle-based real estate group.

Zillow’s chief economist Stan Humphries told Bloomberg that home prices fell 3 percent in the first quarter of 2012 before adding that he expects prices to drop up to 9 percent over the course of the year. Not great news for the approximately 11 million Americans who owe more than their homes are worth.

“We get tired of telling such a grim story, but unfortunately this is the story that needs to be told,” Humphries told Bloomberg reporter John Gittelsohn. “Demand is still quite anemic due to unemployment and the fact that home values are still falling. And that tends to make people more cautious about buying.”

The one dim light in Humphries’ outlook is that he thinks 2012 could be the bottom of the long fall for housing prices. Only time will tell.

President Obama thinks he has a plan to help streamline the refinancing process for those looking to get their heads above water. His proposal would give homeowners access to redoing their mortgages at record low rates though a new government program. The proposed lifeline could mean a $3,000 savings for the average borrower each year. The problem is, Congressional sign-off may be required to enact aspects of the proposal, and in a hotly contested election year, that seems unlikely.

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