At first glance, the latest S&P/Case Shiller Home Price Index data suggest U.S. home values continue to improve, but underneath the surface, the inventory of unsold homes and foreclosures suggest weak demand and an elusive sustainable recovery.

Nationally, U.S. home prices rose 4.4 percent in the second quarter of the year after sliding 2.8 percent in the first quarter, and are now 3.6 percent above year-earlier levels.

Both the 20-City and 10-City Composites in the S&P/Case Shiller data rose 1 percent from May levels, and both composites as well as 15 of the major metro areas surveyed posted year-over-year gains.

“While the numbers are upbeat, other more recent data on home sales and mortgages point to fewer gains ahead,” David Blitzer, chairman of the index committee at Standard & Poor’s, said in a statement.

However, Blitzer added: “Even with concerns about near term developments, we recognize that the housing market is in better shape than this time last year.

For 16 consecutive months, the 10-City and 20-City Composites saw improvement in year-over-year price comparisons. In June, those gains were 5 percent and 4.2 percent for the two composites, respectively. However, June also saw a slowing pace of improvement, hinting a more lasting deceleration in home price improvements could be looming.

On a monthly basis, 17 of the 20 metro areas surveyed registered an uptick in home prices in June over May, Las Vegas being the exception, with a 0.6 percent decline on the month. Phoenix and Seattle were flat.

What’s more, through the second quarter, both composites and 15 cities have seen positive annual growth rates, with no market “registering a double-digit decline,” the report said.

“The worry starts when you remember that the Homebuyers’ Tax Credit has expired, foreclosures are still at high levels, and July data on home sales and starts are very, very weak,” Blitzer said. “If this relative weakness in demand continues, it will likely filter through to home prices in coming months.”