Case-Shiller: Home Prices Pick Up

April home prices increased, adding more credence to the notion that the housing market is stabilizing.

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Could home prices finally be on the upswing?

After seven consecutive months of disappointing data showing property values continuing to slide, average home prices increased more than 1 percent in April for both the 10- and 20-city groups the S&P/Case-Shiller Home Price Indices track.

Though prices fell about 2 percent from levels a year ago, declines were less severe than they have been in more than a year. That, coupled with the monthly uptick in values, is bolstering the notion that the housing market is stabilizing.

"With April 2012 data, we finally saw some rising home prices," said David M. Blitzer, chairman of the Index Committee at S&P Indices, in a statement. "While one month does not make a trend, particularly during seasonally strong buying months, the combination of rising positive monthly index levels and improving annual returns is a good sign."

[Read: New Home Sales Spike to 2-Year High.]

And it's not just because spring and summer are more active buying months. Seasonally adjusted data, which corrects for variations based on time of year, also showed some improvement, yet more evidence that the housing market could be seeing more broad-based gains.

Case-Shiller numbers come on the heels of several other measures of home prices that have shown marked improvement in the past few months. Real estate information website Zillow reported three consecutive months of price increases in its May home value index that tracks dozens of large metropolitan areas across the country.

"Despite nervousness created by a recent weakening in job growth numbers and an uptick in European sovereign debt concerns, we've been able to keep the wheels on the wagon of a housing market recovery longer than we did in the prior two years, with Case-Shiller's April numbers further confirming that home price stabilization remains on track," Stan Humphries, chief economist at Zillow, said in an E-mail.

Humphries expects the trend to continue with May numbers, and attributes some of the gains to the "tug of war" now occurring with the number of homes for sale versus would-be buyers. In some ultra-competitive markets, there are simply more buyers than there are homes for sale. Particularly in the West, reports of Realtors clamoring for more foreclosures to sell are becoming commonplace. That dynamic has fueled bidding wars in some cases, driving up prices in those markets.

[Read: How Low Can They Go? Mortgage Rates Fall (Again).]

But while data on the whole improved with hard-hit cities such as Phoenix seeing tremendous price gains, others continued to lag. Atlanta, still struggling under the weight of foreclosures and distressed properties, was the only city with a double-digit negative change in prices—down 17 percent—for the year. April numbers for Atlanta mark 22 consecutive months of annual home value declines.

Meg Handley is a business reporter for U.S. News & World Report. You can reach her at mhandley@usnews.com and follow her on Twitter.