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The seasonally adjusted S&P/Case-Shiller 20-city and 10-city Home Price Indexes were both up in June (0.9% and 0.8%, respectively) and July (1.3% and 1.2%). Still, both are down on a year-over-year basis — by 12.8% and 13.3%, respectively.

In July, 17 of the 20 cities in the 20-city index recorded house prices increase. That is up from eight cities in May and 16 cities in June. The 20-city index is now at the same level it was in mid-2003, before the dramatic run-up in house prices.

However, considering that the first-time home buyer tax credit has temporarily generated demand, it is a bit premature to declare that house prices have hit bottom. Increasing buyer demand, extending and expanding the home buyer credit and controlling future foreclosures will help determine if the process of stabilization in house prices will continue.

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