Home prices rise again … Is this the start of the housing recovery we’ve all been waiting for?

Red home for sale sign on lawn

When it comes to the housing market, the glass is (almost) half full.

The S&P/Case-Shiller Index, one of best measures of how property values are doing, says home prices posted their second year-over-year increase this summer after going two years without one.

From July 2011 to July 2012, the index found that property prices increased 1.2% across the country.

Home prices jumped by 1.6% from June to July, with all 20 cities Case-Shiller follows reporting gains for the third consecutive month.

Most of those cities — 16 out of 20 — posted year-over-year increases, as well.

Check out this chart of the monthly and year-over-year changes of all 20 cities and both composites.

Case-Shiller Comparison

Metropolitan Area July/June Change (%) 1-Year Change (%)
Atlanta 2.6% -9.9%
Boston 1.8% 0.9%%
Charlotte 0.9% 2.2%
Chicago 2.7% -0.9%
Cleveland 0.4% 0.4%
Dallas 0.9% 3.7%
Denver 1.3% 5.4%
Detroit 3.3% 6.2%
Las Vegas 0.7% -1.0%
Los Angeles 1.3% 0.4%
Miami 2.1% 5.3%
Minneapolis 3.7% 6.4%
New York 1.2% -2.6%
Phoenix 2.2% 16.6%
Portland 1.2% 3.2%
San Diego 1.1% 0.8%
San Francisco 1.9% 4.8%
Seattle 1.4% 3.1%
Tampa 0.9% 3.6%
Washington 1.5% 3.7%
Composite 10-city 1.5% 0.6%
Composite 20-city 1.6% 1.2%

As you can see, Phoenix has the fastest-growing property values, posting an annual increase of 16.6%. That's quite a comeback for one of the housing bust’s hardest-hit cities.

Atlanta is doing the worst, posting a 9.9% annual rate of decline. But its rate of decline slowed to less than 10%, which is better than it had been doing.

So it seems that steadily rising prices and record-low mortgage rates are driving a recovery.

“The news on home prices in this report confirm recent good news about housing," notes David Blitzer, chairman of the S&P's index committee. "All in all, we are more optimistic about housing."

So, if you're looking to buy, it might be time.

Property values are still 30% below where they were at the height of the housing boom back in June of 2006, according to Case-Shiller.

And the Fed's recent announcement that it will purchase $40 billion in mortgage-backed securities each month until the economy improves is bound to keep mortgage rates at rock-bottom lows.

Getting in before the recovery is in full swing can certainly be profitable.

Indeed, we’re hearing more rumblings that home prices are not just rising, but that it's become a seller's market in some cities.

I know that we’ve seen several false starts since the recession ended, so I’m not totally convinced that this is the start of a true, sustainable recovery. We’ll need many more months of data to confirm that.

But as Blitzer puts it: "The positive news in both the monthly and annual rates of change in home prices over the past few months signals a possible recovery in the housing market."

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