U.S. Home Prices Show Highest Year-Over-Year Gains Since Before Housing Bust

Home prices in the U.S. showed the biggest year-over-year increase in January since the summer of 2006, according to Standard & Poor's Case-Shiller home-price indexes.

The year-over-year, 20-city index improved 8.1 percent, an average of 0.2 percent higher than the average predictions from economists polled by Thomson Reuters, the Wall Street Journal reported.

"This marks the highest increase since the housing bubble burst," said David Blitzer, chairman of S&P's index committee.

The 10-city index grew 7.3 percent year over year.

The Case-Shiller index of 10 major metropolitan areas was up 0.2 percent in January from December, while the 20-city index increased 0.1 percent. Both indexes both rose 1 percent on a seasonally adjusted basis.

Low mortgage rates, a reduction in foreclosures and a shrinking inventory of homes on the market, in addition to an improving econ0my overall, have provided much of the lift under the gradually-improving housing market.

Twenty cities across the country recorded year-over-year growth in home prices, with eight posting double-digit percentage increases.

Except for Detroit, all the cities in the index recorded a stronger pace of year-over-year price increases for the month. Meanwhile, New York-area home prices turned even slightly higher, up 0.6 percent after declining for 28 consecutive months.

Markets hardest hit by the housing bust, such as Phoenix and Las Vegas, have demonstrated some of the industry's best numbers lately.

 Phoenix posted a 23 percent price increase in January as Las Vegas home prices were up 15 percent.

Additionally,  the numbers of new homes listed for sale in the U.S. rose last month as well, another sign builders are once again ramping up construction to meet increasing demand.

There were 152,000 homes listed for sale nationwide at the end of February, the most units on the market since November 2011, the Commerce Department said.

Then again, new home sales fell 4.6 percent in February after surging the prior month.

Many economists believe housing will be one of the main economic drivers this year.

In a survey published last week, the Wall Street Journal reports, home builders said they were seeing stronger demand from potential buyers, but there was a lack of land available, costs for building materials are still on the rise and credit conditions remain tight --- meaning the market's still not in the clear quite yet.

Data release today showed the median price for a new home sold in February was $246,800, up 2.9 percent from the same time in 2012.

Despite the upward trend, home sales remain below the new-home sales peak of 1.4 million in July 2005 and even the then-low mark of 273,000 in February 2011.