The growth in housing prices between its lowest point of the year in March to the end of July reached a higher point than expected from historical price trends, according to Radar Logic’s RPX monthly composite, which measures housing prices in major US markets. From March 30 to July 23, 2009, the composite grew by 7.2%, compared to the 5.4% average gain over that same period over the last 10 years. “Had the increase in the RPX Composite been the result of seasonal factors alone, one would expect the seasonally adjusted index to remain flat over that period,” researchers said. “The fact that it increased indicates that the strength in home prices exceeds what one would expect given seasonal factors alone.” The Composite is still roughly 29% below its peak in June 2007, according to the report. And, if historical trends continue, the colder autumn season and the start of the school will drive down demand. But prevalent negative equity, conservative mortgage underwriting, the expiration or extension of government incentives like the first-time home buyer tax credit could also influence demand in the near future, according to researchers. However, HousingWire reported last week that a US Senate bill seeks to extend the homebuyer tax credit for six months. According the National Association of Realtors (NAR), the supply of homes is large and likely to increase from the inventory of 4m existing homes in July, which is “only a fraction of the large and growing inventory of foreclosed homes,” according to Radar Logic's Composite index. Banks that only trickle their REO inventory on to the housing market tend to reduce the distressed-property impact on prices. “If the current trend continues and the demand for housing holds up, home prices could continue to recover despite the record number of foreclosures,” researchers said. But Amherst Securities Group analysts on Wednesday took a less optimistic tone, indicating a shadow inventory of 7m loans destined for liquidation will likely eliminate some positive housing signs seen in the last few months. Write to Jon Prior.