The number of U.S. homes worth less than the debt owed on them dropped in the third quarter, largely because of mounting foreclosures rather than a rise in property values, Bloomberg reported after the release of a report by CoreLogic Inc.

About 10.8 million homes, or 22.5 percent of those with mortgages, were “underwater” as of Sept. 30, according to CoreLogic. That was down from 11 million, or 23 percent, at the end of June, the third straight quarterly decline.

The number of homes offered in foreclosure auctions averaged 110,000 a month in the third quarter compared with about 98,000 in the same period a year earlier, said Mark Fleming, CoreLogic’s chief economist.

Equity in U.S. homes fell by $649 billion in the third quarter to $16.6 trillion, the Federal Reserve said Dec. 9. Home prices may drop as much as 11 percent more through the first quarter of 2012 before finding a bottom, Bloomberg said, citing a separate report.

About 2.4 million borrowers had less than 5 percent equity in their home from June through September, bringing the total amount of mortgaged homes underwater or near negative equity to 27.5 percent.

In Greater Des Moines, 10.2 percent, or 10,485, of all residential properties with a mortgage were in negative equity for third quarter 2010, CoreLogic said. An additional 7.4 percent, or 7,626, were in near negative equity, according to the report.

The total value of negative equity in the period was $744 billion, compared with $800 billion at the end of 2009.

The CoreLogic report is based on data from 48 million properties with mortgages, comparing public records of outstanding debt on first and second liens with CoreLogic’s proprietary valuation models for residential properties.