The percentage of homes "under water" fell nationwide in the second quarter, even as home values continued to drop, according to a report by property valuation site Zillow.

Zillow’s Home Value Index, which tracks median home values in 440 metropolitan statistical areas across the country, fell 3.3 percent compared to the second quarter of 2009 and 0.6 percent compared to the first quarter, to $182,500.

"Nationally, home values are moving in the right direction as rates of decline continue to slow. There is a large unknown on the horizon, however, as these second-quarter numbers are still heavily influenced by the federal homebuyer tax credits, which were available for homes under contract by the end of April," said Dr. Stan Humphries, Zillow’s chief economist, in a statement.

"Home sales are declining significantly in the post-tax credits environment, but the impact of falling home sales on already-declining home values is yet to be seen. Recent trends in home values suggest the nation could reach a bottom in the latter half of 2010, but we continue to be cautious about the impact of declining home sales."

Meanwhile, a smaller share of owners of single family homes owed more on their mortgage than the value of the home: 21.5 percent, compared to 23 percent at the same time last year and 23.3 percent in the first quarter.

Foreclosures reached a new peak in the second quarter — more than one out of every 1,000 (0.11 percent) U.S. homes was foreclosed upon. Meanwhile, foreclosure resales fell in the second quarter, to 16.9 percent, a decline of 2.9 percent quarter-over-quarter and 1.9 percent year-over-year.

About 26 percent of for-sale homes in the second quarter sold for less than the seller originally paid, the report said.

Markets performed differently according to local conditions. In California, for example , federal and state homebuyer tax credits have helped keep home values up. Four markets have seen their home values rise by more than 5 percent in the past year: San Digo (7.3 percent), San Francisco (5.9 percent), San Jose (5.6 percent) and Los Angeles (5.5 percent). More than a quarter, 27.8 percent, of markets tracked by Zillow in the Golden State saw their home values rise.

At the same time, Florida and Arizona markets continued to see sharp year-over-year drops in home values. In Florida, home values in the Miami-Fort Lauderdale and Ocala metro areas each fell 15.2 percent. In Arizona, Phoenix home values fell 11.8 percent.

"As the national housing market limps toward stabilization, individual markets are a mixed bag. The double tax credits for some California homebuyers have certainly stimulated housing demand there and are partly responsible for the rapid — and likely unsustainable — rates of appreciation in many markets across the state," Humphries said.

"While there is some uncertainty about how home values will respond in those markets once all incentives are removed, it’s certain they can’t continue at their current rates of appreciation, but is unlikely they will re-test the low points reached in 2009. Markets in other parts of the country, like Miami and Phoenix, are not yet showing signs of reaching a bottom in home values. High supply continues to be a challenge in states like Florida and Arizona."

Not all metro areas in California saw home values increase, however, as foreclosure resales still made up a significant percentage of sales in some hard-hit markets in that state in June: 55.8 percent in El Centro; 54.6 percent in Madera; and 53.6 percent in Merced.

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