Home prices are definitely heading up, but they have done so a number of times in the last few years only to turn back down.

According to the latest S&P/Case-Shiller Home Price Indices, home prices are going up all over the country. Do these increases signal that we’ve finally left the bottom behind and are now in a period of sustained price increases?

The S&P/Case-Shiller Home Price Indices

This “leading measure of U.S. home prices” is actually a group of three indices measuring “the average change in home prices” on a monthly basis in different geographic markets. In combination they measure single-family home prices compared to what they were in January of the year 2000. The price back then was assigned an index value of 100 in each market, with home value increases or decreases since then reflected as percentage changes in that value. For example, an index value of 125 reflects a home value of 125%, a 25% increase in home values compared to what they were as of that fixed January 2000 starting point.

Earlier False Starts

In the tough 7 years since the home value high reached during the summer of 2006, there have been a number of times when we have had a price-rise bump, only to have the home values turn back down, usually resulting in a loss of all of the increase in value that had been gained. For example, during the second quarter of 2009, the indices had risen for three months in row, only to turn back down again. After three more years of ups and downs, the lowest point was not hit until as recently as March 2012.

The Greatest Consistency in Growth Since 2006

However, we are now in the most sustained period of growth in home values since the plummeting in home values that began in 2006. The year-to-year increase in home values in the U.S. since the March 2012 has been more than 10%.

There are many indications that the current growth is more sustainable than the previous false starts.

It is happening very broadly. All 20 cities measured in the S&P/Case-Shiller Home Price 20-City Composite index increased values on an annual basis for at least three consecutive months.

The value increases are accelerating. Twelve of the twenty cities had year-to-year value growth of at least 10%, and three had more than 20%.

All three of the indices that make up the S&P/Case-Shiller Home Price Indices have had their highest annual returns since 2006.

Also, as one of their officials states: “Other housing market data reported in recent weeks confirm these strong trends: housing starts and permits, sales of new home and existing homes continue to trend higher.

What’s in the Crystal Ball?

As stated in a recent article by Matthew Yglesias, Slate‘s business and economics correspondent:

It could be that this is a bull trap and there’ll be a whole secondary housing price collapse that brings us back down to 1990s levels. Or prices could rise a bit more and stabilize at 2004 levels. Financial markets are simply very hard to predict. Relative to rents, houses still look cheap in most markets, and that situation seems unlikely to persist. But whether that means rents will fall or housing prices will rise is very difficult to know.