NEW YORK ( TheStreet) -- The number of "underwater" homeowners fell at its fastest pace ever in the third quarter. Unfortunately, about one in five homeowners with a mortgage still owes more than the home is worth, and if those who are close to being underwater are included, the figure remains a dismal 39%. That higher "effective" negative rate includes homeowners whose equity, or current home value minus remaining mortgage debt, is less than 20%. After paying a sales commission and other selling costs, such a homeowner may not have enough money left for a down payment and other costs of buying a new home. At 39%, that's a lot of homeowners who are effectively trapped in their homes, unable to move, for example, for a new job. This is one reason the inventory of homes for sale is relatively low, hampering the housing market's recovery. Still, the trends are positive. Zillow ( Z) the home-listing firm that compiled the data, notes that the percentage of underwater, or negative-equity homes, has fallen by a third from the peak of 31.4% in the second quarter of last year. Because about a third of all homeowners own free and clear, without a mortgage, the overall underwater rate is 14.7%. Zillow.com, Realtor.com and Trulia.com ( TRLA). If the home still suits you, muddling along is probably the best option. For an ordinary sale, you'd have to come up with other money to make up the difference between what the home will fetch and what you owe your lender. If you need to move, or just feel you're so deep underwater that your monthly payments are wasted, you can approach the lender about a short sale. In these, the lender accepts the sale proceeds as enough to settle the larger debt, allowing the homeowner to get free. As Zillow says, lenders have become more willing to conduct short sales as a way of putting their bad loans behind them. A short sale means you lose whatever you've put into the home -- your down payment and costs of improvements. But if the home is underwater, that money is lost anyway.