Home prices increased 2% during the second quarter, but challenges remain as the market exits the busier spring and summer season, according to Integrated Asset Services. IAS, which handles default management and valuations, found increases in seven of the nine U.S. Census regions on its home price index during the period, led by a 3.1% gain in the South and a 2.5% increase in both the Northeast and Midwest areas. Other indexes showed positive gains this summer, but many analysts braced for where prices will go from here. Altos Research projected prices to head down again. Clear Capital said the gains didn't fully offset losses over the previous winter and added that as long as foreclosed homes account for such a large percentage of the market, prices will continue to suffer. Zillow (Z) released a report Tuesday showing home values declined 6.2% from one year ago. IAS showed home prices remain down 0.6% year-to-date and down 1.3% over the previous 12 months. Paul Sveen, CEO of IAS, echoed the concerns analysts voiced. Tightened credit, high unemployment, elevated foreclosures and still lingering delays in the sale of repossessed properties continue to weigh on the market and the overall economy. "It’s absolutely imperative we — and by we I mean those of us on the servicing side — speed up the distressed sale process," Sveen said. "The longer it takes to put the foreclosure-processing issue to rest, the greater will be the backlog of properties. Even confident buyers will hold off, I’m afraid." Write to Jon Prior. Follow him on Twitter @JonAPrior.