Though the news on home prices has been repetitive in recent months, we don't tire of reporting it. After reporting falling home prices over the past four years, there's a lot of ground to be made up on the upside.

Thankfully, the upside continues to dominate. CoreLogic provides the latest news on rising home prices, reporting that prices increased 1.8 percent in its May home price index compared to its April index, and are up 2 percent year over year. Remove distressed properties (which are becoming less distressed these days) from the mix and the index is up 2.3 percent month over month and 2.7 percent year over year.

The sustained uptrend is significant for an obvious reason: A price recovery trend stimulates more buying and selling. The trend also refutes many predictions made earlier this year – from CoreLogic, Trulia, Zillow, Case-Shiller – that prices wouldn't move up meaningfully until the end of 2012. It just goes to show how difficult the prediction game is.

That said, we are going to engage in a little predicting of our own. We think the upward trend in prices is sustainable over the long haul. For one, there's a dearth of inventory. Low supply, particularly in new homes, will help keep prices elevated.

The relationship between rent prices and home prices is another reason. Reis Inc., a real estate information firm, reports that national asking rents are the highest they've been in five years. The national average asking rent is $1,091. At the same time, vacancies are the lowest they've been in over 10 years. Low supply coupled with high demand means rents will continue to rise.

Concurrently, the home affordability index in many metropolitan regions is at multi-year lows. It's a great opportunity for people who normally rent to buy. In some markets, a starter home can offer a $200-to-$300 monthly savings in housing expense.

Mortgage lending rates have no doubt contributed to the high affordability index. Rates continue to drop a couple basis points week after week. Over time, these incremental drops have produced significantly lower lending rates.

Our soapbox issue at this point remains credit availability. Too many potential borrowers are still locked out of the market. The worst is over for financial institutions and the economy has stabilized. The best move regulators could make to improve participation is to ease the rules.

To be sure, lending prices need to reflect risk, but risk can be attenuated through judicious underwriting. Judicious underwriting, in turn, most often arises from a diverse, dynamic lending base. That's tough to conjure when costs associated with regulation are historically high.

Courtesy of Jessica Regan.

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