The Case-Shiller 20-City index rose for the third consecutive month, with all 20 cities showing price increases in June. Overall the index rose 1.1 percent. The biggest gains were seen in badly hit markets in the Midwest, with 3.2 percent month-to-month increases reported for both Chicago and Minneapolis and Detroit and Cleveland reporting 2.2 percent and 1.5 percent gains, respectively. These sharp increases appear to have been driven primarily by price jumps in the bottom third of the market. While Detroit and Cleveland don't have tier indexes, prices for bottom-tier homes rose in Chicago by 6.5 percent and in Minneapolis by 6.1 percent.

It is unlikely, however, that this recent data could indicate the beginning of a turnaround for prices. Last month, the Census Bureau released data on vacancy rates for the second quarter. While they have edged down slightly from their peak, rates on both ownership and rental units remain at near-record-high levels. This enormous excess supply of housing will exert downward pressure on prices at least through 2012. The tightening of credit by lowering limits on conformable mortgages will also put downward pressure on prices. In short, it is likely that this upturn in prices will not persist.

For more, check out the latest Housing Market Monitor.

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