Data through August 2012, released today by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed average home prices increased by 0.9% for both the 10- and 20-City Composites in August versus July 2012. Nineteen of the 20 cities and both Composites posted positive monthly gains in August; Seattle was the only exception where prices declined 0.1% over the month.

The 10- and 20-City Composites recorded annual returns of +1.3% and +2.0% in August 2012 – an improvement over the +0.6% and +1.2% respective annual rates posted for July 2012. Eighteen of the 20 cities and both Composites posted better annual returns in August compared to July 2012. Annual returns for Dallas remained unchanged at +3.6% and Chicago saw its annual return worsen from -1.0% in July to -1.6% in August 2012. Only three cities posted negative annual returns in August: Atlanta with -6.1%, New York at -2.3% and Chicago at -1.6%. Phoenix posted its fourth consecutive month double-digit increase in annual rates with a recording of +18.8% in August 2012. It is the best performing city among the 20 cities followed by S&P Dow Jones Indices.

In August 2012, the 10- and 20-City Composites recorded respective annual increases of 1.3% and 2.0%, and monthly gains of 0.9% each.

Home prices continued climbing across the country in August. Nineteen of the 20 cities and both Composites showed monthly gains in August. Seventeen cities and both Composites posted positive annual returns in August 2012. In 18 cities and both Composites annual rates improved in August versus July. Dallas’ rate remained unchanged at +3.6% and Chicago worsened slightly from a -1.0% annual rate in July to a -1.6% annual rate in August.

Phoenix continues to lead the home price recovery. It recorded its fourth consecutive month of double-digit positive annual returns with a +18.8% rate for August. Atlanta posted a -6.1% annual rate, however this is significantly better than the nine consecutive months of double-digit declines it posted from October 2011 through June 2012. Las Vegas’ annual rate finally moved to positive territory with a +0.9% annual rate of change in August 2012, its first since January 2007.

The sustained good news in home prices over the past five months makes us optimistic for continued recovery in the housing market.

News on home prices confirms other good news about housing. Single family housing starts are 43% ahead of last year’s pace, existing and new home sales are also up, the inventory of homes for sale continues to drop and consumer mortgage default rates are reaching new lows. Further consumer confidence continues to rise. Even as we end the seasonally strong home buying period, the statistics are positive. For the fifth time in a row, both Composites had monthly gains. Home prices in Seattle fell modestly in August, but other than that the 20 cities have also seen home prices generally improve since April.

As of August 2012, average home prices across the United States are back to their summer/autumn 2003 levels for the 10-City and 20-City Composites. Measured from their June/July 2006 peaks, the decline for both Composites is approximately 30% through August 2012 and approximately 35% from the June/July 2006 peak values. The August 2012 levels for both Composites are about 8.5% above their recent early 2012 lows.

In August 2012, 19 MSAs and both Composites posted positive monthly gains. Seattle was the only city with a negative monthly return of -0.1%. Cleveland and Las Vegas were the only two cities with stronger monthly returns in August versus June. Cleveland posted a +1.0% month-over-month change in August as compared to +0.4% in July. Las Vegas had a monthly increase of 1.6% in August, an improvement over the +0.7% in July. The remaining 18 cities and two Composites had lower monthly returns in August versus July.

Atlanta, Detroit and Las Vegas continued to post average home prices below their January 2000 levels. With an index level of 194.00, Washington DC is the city showing the biggest increase in average home prices since January 2000.