NEW YORK ( TheStreet) -- Home prices in the 20 largest metros rose 12.1% from a year ago in June after rising 12.2% in May.

The S&P/ Case-Shiller 20-City Composite Index rose 2.2% from May. On a seasonally adjusted basis, the index rose by a more modest 0.9% from the previous month.

The 20-City Index was expected to post a 1.1% monthly increase on a seasonally adjusted basis and a 12.2% increase year over year, according to Zillow.

Nationally, home prices rose by 10.1% over the past four quarters.

The Case-Shiller Index is based on a three-month moving average, so the index captures home price action for April, May and June.

The impact of rising interest rates in May and June on the index is therefore likely to be somewhat muted. The full impact of rising rates would likely be felt in September.

However, there are signs that prices are moderating. Although the top 20 cities all posted monthly and annual increases, only six cities-- Charlotte, Cleveland, Las Vegas, Minneapolis, New York and Tampa -- gained at a faster pace in June than in the previous month.

Home prices have been rising over the past year amid a shortage of supply. Recently, inventory has been rising and there are signs of buyer fatigue, which could moderate price action in coming months.

"Overall, the report shows that housing prices are rising but the pace may be slowing," said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. "As we are in the middle of a seasonal buying period, we should expect to see the most gains. With interest rates rising to almost 4.6%, home buyers may be discouraged and sharp increases may be dampened."

He also noted that other housing data, while positive, is not as robust as it was in the spring. Starts and sales of new homes, for instance, continue to lag the stronger pace set by existing homes.

Still, the 20-city index has gained 19% from its March 2012 low and is now only 23% below its June/July 2006 peak.

Significantly, the S&P Index does not factor in the impact of the share of distressed sales on prices. Therefore, it can exaggerate the impact of price increases as the share of foreclosures and short sales, which sell at a discount, decline.

U.S. home prices rose 8.4% year over year in June, according to a report from Lender Processing Services (LPS).

The LPS report is based on closings in June and represents the prices of non-distressed sales by taking into account the discounts of foreclosures and short sales. According to LPS, the index covers 89% of single-family residential properties in the U.S.

-- Written by Shanthi Bharatwaj New York.

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