At the beginning of the year, we were in the minority: we thought 2012 would see improving home prices in more metropolitan markets across the country.

We've been surprised on the price front, and delightfully so, because we didn't expect the price recovery to be as coin housepervasive and as strong as it has been. What's more, the data on pricing continue to point to higher home prices in even more markets.

Indeed, CoreLogic's Pending Home Price Index for August shows that home prices rose 4.6% year over year, posting the biggest annual increase since 2006. Looking at monthly data, August posted a 0.3% increase over July, which marks the six-consecutive monthly increase.

Additional price data from Trulia show that asking prices on for-sale homes – which lead sales prices by approximately two months – increased 2.5% year over year in September and 0.5% compared to August. According to Trulia, 2012 will see an annual increase in asking prices for the first time in six years. Trulia’s Chief Economist Jed Kolko says, “Right now, prices are recovering across the country, with few local markets left behind.” Our own empirical observations confirm Mr. Kolko's conclusion.

We've been watching one particular market with keen anticipation all year, and that's Las Vegas. We knew that it would be only a matter of time before a recovery took hold. It appears the wait is finally ended. Clear Capital's data show home prices in Las Vegas increased 8% in September. What's more, Clear Capital expects Las Vegas home prices to increase another 9.5% over the next six months.

One of our more-frequent refrains over the past two years is that markets eventually clear. Lower prices always stimulate demand. Higher demand, in turn, stimulates higher prices. Thankfully, the market is finally clearing in beleaguered Las Vegas.

We expect to see home prices in Las Vegas and in many other large metropolitan markets to continue to improve in coming years. We are not alone in this prognostication. Analysts at Goldman Sachs released a research note this week that projects continued price improvement. What's more, Goldman expects higher home prices even in its downside scenario.

So, we have a market of rising home prices and a market of falling lending rates. In fact, mortgage lending rates were down again this past week. Lower rates have stimulated another surge in refinances. More encouraging, lower rates have aroused more purchase-application activity.

We look forward to even more purchase-application activity. Rising home prices mean less negative equity. Less negative equity, in turn, means more people will be in a position to sell without bringing additional funds to the table.

Courtesy of Jessica Regan.

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