In the years following the housing market collapse, property values slid more than 30 percent in some areas of the country. However, as the real estate industry continued to find its footing, prices increased in July for the third consecutive month.
On an annual basis, the 10- and 20-city composites rose 1.5 and 1.6 percent, respectively, according to property data from the latest Standard & Poor's/Case-Shiller Home Price Index.
On a local level, Phoenix experienced the largest home price gain in July, the report said. In contrast, Atlanta reported the biggest drop.
"The news on home prices in this report confirms recent good news about housing," said S&P index committee chairman David Blitzer.
Recent developments, such as rising construction rates, increased home sales and a thinning property inventory were believed to be major factors that contributed to the appreciating prices, Blitzer added.
Although activity in the housing market often slows in the fall and winter months, real estate experts are more optimistic about transaction rates during the latter half of 2012. If prices continue to increase, this could give a greater number of owners incentive to sell their homes, further contributing to the real estate recovery.