US home prices continued to rise in the third quarter, adding to evidence that the housing market was gradually bottoming out, a closely-watched report showed on Tuesday. According to the S&P Dow Jones Indices, its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, was up 3.6 percent in the third quarter of 2012 versus the third quarter of 2011, and was up 2.2 percent from the previous second quarter Meanwhile, in the latest month of September, 17 of the 20 metropolitan cities post better annual returns in September. Month- over-month, 13 cities posted positive monthly gains and average home prices in the 20 cities rose 0.3 percent. On a year-to-year basis, the 20-city index improved 3 percent, in line with market expectations.\"Home prices rose in the third quarter, marking the sixth consecutive month of increasing prices,\" said David M. Blitzer, Chairman of the Index Committee. \"We are entering the seasonally weak part of the year. The headline figures, which are not seasonally adjusted, showed five cities with lower prices in September versus only one in August; in the seasonally adjusted data the pattern was reversed: one city fell in September versus two in August. Despite the seasons, housing continues to improve,\" he added.