Home prices rose 0.3% in September, compared to 1.2% in August, according with the Standard & Poor's/Case-Shiller 20-city house price index, which posted its fourth consecutive monthly increase.
Overall, the 20-city HPI is down 9.4% from a year ago but the declines are decelerating.
In August, home prices were off 11.3% from a year ago. Values have improved since the spring, according to David Blitzer, chairman of S&P's index committee.
"However, the gains in the most recent month are more modest than during the seasonally strong summer months," he said.
IHS Global Insight economist Patrick Newport said prices are stabilizing across the country but he still expects another 5% decline.
"We believe that prices have further to fall — about another 5% — because the foreclosure rate, which hit a record at the end of the third quarter, and the unemployment rate are still rising," he said.