An estimated 25 million homeowners, or 48 percent of those with mortgages, will owe more on their loan than their house is worth by the first quarter of 2011, according to an analysis by Deutsche Bank released this week and reported today by MarketWatch.

“For many, the home has morphed from piggy bank to albatross,” analysts Karen Weaver and Ying Shen said in a research report.

More and more strapped homeowners are finding that the amount they owe on their mortgage exceeds the house’s value, as prices and sales continue to drop in many parts of the country. This situation is known as negative equity or being underwater on the mortgage.

Deutsche Bank estimated that 14 million U.S. homeowners had negative equity at the end of the first quarter, or about 27 percent of owners with a mortgage. More Americans could go underwater on their mortgages if prices continue to fall, which makes it more difficult to refinance.

There have been lukewarm signs recently that the residential market is stabilizing after plunging from its peak in 2006. However, job losses, mounting foreclosures and depressed credit markets could delay the recovery, economists say. In particular, many worry about an upcoming wave of resets of interest rates on adjustable-rate mortgages that could spike foreclosure rates.

Although subprime and option adjustable rate mortgages “are currently the worst cohorts with underwater borrowers, we project that the next phase of the housing decline will have a far greater impact on prime borrowers,” the Deutsche Bank analysts wrote.

They projected that 41 percent of prime conforming borrowers and 46 percent of prime jumbo borrowers will be underwater by the first quarter of 2011.

Mark Zandi, chief economist at Moody’s Economy.com, said negative equity and foreclosures are the main threats to an economic recovery.