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Underwater homes keeping a lid on inventory

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Home prices saw the largest spring gain in a quarter century during the three months through May, but the sluggish economy threatens further price recovery, according to a monthly report from economists at real estate and mortgage data aggregator CoreLogic.After reaching a low for the downturn in February, home prices rose 5.6 percent during the three months ending in May -- the largest increase within the same three-month period in the last 25 years, CoreLogic said. May was also the third consecutive month home prices posted year-over-year gains, increasing by 2 percent. Among the 100 largest metro areas, 71 saw price increases -- the largest number since November 2006, according to CoreLogic. A pending home price index from CoreLogic indicates that prices rose a further 1.6 percent from May to June. Can home prices continue to recover even if the overall economy does not? "The short answer is no, because prices are highly correlated to median incomes, which have not increased o...