The Standard & Poor's/Case-Shiller home price index of 20 major cities released Tuesday rose 0.3 percent to a seasonally adjusted reading of 144.96 in September. Prices rose month-over-month in 11 metro areas, a weaker showing than in recent months.
Compared with a year earlier, prices were down 9.4 percent, the smallest year over year decline since January 2008.
"We have seen broad improvement in home prices for most of the past six months," David M. Blitzer, chairman of the Standard & Poor's index committee. "However, the gains in the most recent month are more modest than during the seasonally strong summer months."
Prices, as measured by the seasonally adjusted 20-city index, are up more than 3 percent from the bottom in May. But they are still down 30 percent from the peak in April 2006.
Rising home prices are a key ingredient to rebuilding the economy. Homeowners feel wealthier when their property appreciates in value and are more likely to spend money. Rising prices also help millions of homeowners who owe more to the bank than their homes are worth.
Industry experts, however, still worry that rising unemployment and foreclosures could stifle the rebound in prices, causing them to dip again. "While many are interpreting the most recent results from this index as indicative of a bottom in home prices, we do not believe this to be the case," wrote Joshua Shapiro, chief U.S. economist at MFR Inc.