The decline in foreclosures these last few months seems to be the consensus explanation for May's somewhat unexpected uptick in home prices, according to this Journal piece:
The drop in foreclosure sales was likely the product of U.S. banks' moratorium on home foreclosures, which they undertook as the government launched a round of programs to modify and refinance loans for at-risk borrowers. Most banks ended their foreclosure moratoria in March.
But, of course, with rising unemployment and various financing issues arising, there's no reason to think the foreclosures can't ratchet back up again, leading a lot of economists to suspect the uptick is just temporary:
"Is this just a spring bounce that was partly related to the drop in distressed sales?" asks Thomas Lawler, an independent housing economist based in Leesburg, Va. One key question, he says, is whether another wave of foreclosures could come along to offset the home-inventory decline that has boosted many markets. ...
Some housing analysts say they expect falling prices on mid-to high-end homes to weigh on the Case-Shiller index. The supply of these homes has swelled in recent months as borrowers struggle to obtain financing.
Borrowers of "jumbo" mortgages, which are too big for government backing, face higher rates. ...
"We think [the sales index] will look like a 'W,' where prices go up until the foreclosures at the higher end translate into another leg lower," says Ivy Zelman, chief executive of Zelman & Associates, a housing-research firm.