Almost 29 percent of all home mortgages in the Chicago area were underwater during the year’s second quarter, an improvement from the 31.8 percent level recorded in the first quarter, Zillow reported Monday.

Still, far more mortgages locally are underwater, meaning more is owed on the loans than the homes are worth, than nationally. Zillow, an online real estate site, said the number of single-family homes nationally that are underwater was 21.5 percent in the second quarter, compared with 23.3 percent in the first quarter and 23 percent a year ago.

Zillow also said home values in the Chicago area have fallen 27.2 percent since their peak in July 2006 and now stand at a level they were at in November 2002. But there is a glimmer of hope: the company also said that on a quarter-over-quarter basis, home values rose 1.6 percent during the second three months of the year. It was the first quarterly increase since the second quarter of 2006.

Nationally, sales of foreclosed homes fell to 16.9 percent of all home sales in June, down from a 2010 high of 19.8 percent of all home sales in February.

(Source: Chicago Tribune)