Despite declining slightly from the previous month, home prices were up on a year-over-year basis in September, according to CoreLogic.
The firm's September Home Price Index report showed prices increased 5 percent compared to the previous year, while dropping 0.3 percent on a month-over-month basis. This marked the seventh consecutive month of annual gains and the largest improvement since July 2006.
Looking to next month, the Pending HPI projects home prices to jump 5.7 percent on a year-over-year basis and decline 0.5 percent from September.
"Home prices are responding to better market fundamentals, such as reduced inventories and improved buyer demand," said Anand Nallathambi, president and CEO of CoreLogic. "So far this year, we're seeing clear signs of stabilization and improvement that show promise for a gradual recovery in the residential housing market."
Stabilization in the real estate market could potentially increase activity, as those who were on the fence about home buying could jump into the market. In addition to home prices, residential construction and new and existing home sales have all shown improvements for housing.