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The S&P CoreLogic Case-Shiller home price index rose 5.9 percent in July compared a year ago, better than the 5.7 percent expected by economists polled by Reuters.
The rise was also higher than June's 5.8 percent increase.
David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, said consumers were the key driver to the current economic expansion.
Blitzer said recent gains in home prices have largely come from the Pacific Northwest. Seasonally adjusted, 12 of the 20 cities in the composite reported price increases in July.
Growth in the 20-city composite groups was up 5.8 percent, compared with June's 5.6 percent rise.
Seattle, Portland, Oregon, and Las Vegas reported the highest year-over-year gains among the 20 cities.