Just when we thought the housing market was on the way to recovery, Deutsche Bank comes out with a research survey saying that the number of underwater mortgages is going double over the next year and a half until 48 percent of all homeowners owe more than their home is worth.

Here’s what they found:

• 41 percent of prime conforming loans will be underwater by the first quarter of 2011. Only 16 percent were underwater by the end of the 2009 first quarter. They make up two-thirds of all U.S. mortgages.
• 46 percent of prime jumbo loans will be underwater, up from 29 percent in the first three months of 2009. Jumbo loans make up 13 percent of the total market share of loans and “the impact of this is significant given that these [jumbo] markets have the largest share of the total mortgage market outstanding,” the analysts said.
• 69 percent of subprime loans with be greater than the property value, up from 50 percent this past March.
• 89 percent of risky option adjustable-rate mortgages will be underwater in 2011, up from 77 percent.
• Home prices are expected to drop on average 14 percent from now to first quarter of 2011 in the 100 largest U.S. metro areas, for total average drop of 41.7 percent since the beginning of the housing crash.
• The top 5 hardest hit states are likely to be California, Florida, Arizona, Nevada, and Ohio.
  The major danger of this forecast coming true is that is will likely lead to millions more foreclosures, which could hold back a true housing market recovery.

And all this just when we were getting excited about home sales rising for several months, prices stabilizing, and housing inventory shrinking!