The S&P/Case-Shiller national home price index, which tracks more than 80% of the housing market in the United States, climbed 6.9% in Q2 compared to Q1 of 2012.

“We seem to be witnessing exactly what we needed for a sustained recovery; monthly increases coupled with improving annual rates of change,” said David Blitzer, a spokesman for S&P, in a statement. “The market may have finally turned around.”

Here is some supporting data:

• Two other key indexes covered in the S&P/Case-Shiller report also show gains. The 20-city index was up 6% for the quarter and the 10-city index rose 5.8%.

• National prices were up 1.2% compared with a year earlier, and the 20-city and 10-city indexes also gained y/y. It was the first time all three measures showed positive annual growth rates since the summer of 2010, when generous tax credits for homebuyers were in place.

• In July, new home sales were 25% better than a year earlier; existing home sales gained 10% y/y; and developers applied for 30% more residential building permits.

• The steep increase in home prices “feels really good after six years of straight down,” said Mark Zandi, chief economist of Moody’s Analytics.

• He cautioned about overstate the case for the housing recovery. The mix of homes being sold has changed lately, with fewer repossessed homes on the market, noting that those discounted sales of had driven down prices.

• Zandi believes the positive news on housing will carry over to the rest of the economy saying, “Housing is beginning to act as a tailwind for the recovery.”

• The home price improvement will likely have a positive impact on foreclosure rates, according to Michael Fratantoni, vice president for research and economics for the Mortgage Bankers Association.

• Foreclosures have already been falling and could drop more should the upswing in home prices continue.

• Rising home values means rising equity, resulting in fewer borrowers underwater. Plus an improving housing market will also give homeowners more confidence in their home investment.

• “There has also been a lot of concern about strategic defaults,” said Fratantoni. “That should ease now. When home prices go up, people have a financial incentive to hold onto their homes and they’re less likely to walk away.”

• Rising prices are likely to push potential homebuyers off the fence, where many have been waiting out the price decline, according to Doug Duncan, chief economist for Fannie Mae.

• “Their perception that we hit the bottom takes out the risk of buying into a falling market,” he said. “That should increase demand…if they also believe that mortgage rates have reached a bottom as well.”

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