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Author's Note: This post was written for Bring the Blog, a mortgage and real estate professionals' service that writes supplemental blog content. I am the owner of the company.  The local keywords "Cincinnati", "Blue Ash", and "Hyde Park" were added automatically via Bring the Blog's localization system.

More positive signals from housing -- home values are still on the rise.

According to the Federal Housing Finance Agency, after posting its first quarterly increase since 2007 this past September, the Home Price Index rose by another 0.6 percent in October.

Prices are up in 4 of the last six months.

But before we take the stats to the proverbial bank, it's important that we recognize the Home Price Index for its shortcomings.

1. HPI only accounts for homes with mortgages backed by Fannie Mae or Freddie Mac
2. HPI only accounts for re-sold homes -- newly-built homes are excluded
3. HPI aggregates national data whereas real estate markets are local phenomena

On a broad scale, the Home Price Index can be useful, but it doesn't specifically apply to Cincinnati or any specific U.S. market.  For that, analysts tend to turn to the Case-Shiller Index, a privately-produced report that assesses home values in 20 cities nationwide.

The good news for home sellers in Blue Ash and Hyde Park is that Case-Shiller's most recent report corroborates the government's conclusion -- home values are creeping back.

Home buyers should pay attention. When public and private sector data is in accord, markets tend to go along and, looking back, housing likely bottomed in February 2009.

Since then, home sales are up, home supplies are down, and values have increased in most U.S. markets. Furthermore, so long as mortgage rates remain low and government stimulus is in place, the trend should continue through at least the first quarter of 2010.

If you're on the fence about buying a home right now, or wondering about timing, consider your options vis-a-vis today's market.  Into the new year, homes won't likely be as cheap to buy, nor to finance.

The housing market is in recovery. There's lot of stats to back it up so take your pick:

• Existing home sales are up and supplies are down
• New home sales are up and supplies are way down
• Pending home sales are posting at record paces

And, perhaps, most importantly, the best gauge of the housing market's health -- home values -- is showing consistent improvement.  Both private-sector Case-Shiller Index and the government's own Home Price Index showed home prices on the mend.

Foreclosures may not yet have peaked, but the worst of the housing market is definitely behind us. Anyone who tells you otherwise is selling something.

Between the 2nd and 3rd quarter this year, according to the Federal Home Finance Agency, home values rose 0.2 percent nationally.

Now, it's a statistic without direct meaning to homeowners because the "national real estate market" doesn't exist.  You don't buy a home in America -- you buy a home in Cincinnati.  The Home Price Index data remains important for trending reasons, however.  Especially to lenders.

See, unlike you and me -- people with a limited geographical exposure to the housing markets -- lenders are nationwide.  To them, national data is extremely relevant.

A "national" real estate portfolio is a lender's path to diversification.

So, as we dissect Q3's data, it's important to pick up on a few of the subtler points as compared to Q2.

First, geography does not appear correlated to home price improvement. Each region is represented equally in the Top 10 and spread equally throughout the list.  Clearly, this isn't just a Coastal Recovery.

And second -- stunning analysts -- is that home value changes are occurring independent from foreclosure activity.  For example:

1. California ranks #2 in home value improvement between Q2 and Q3 2009.  Over that same period, California's Foreclosures per Capita is second-worst in the nation, behind Nevada.
2. Illinois beat the national average for home value improvement between Q2 and Q3 2009.  Over that same period, though, Illinois foreclosure rate was nearly 3 times the national average.
3. Between Q2 and Q3 2009, Delaware's foreclosure activity was third-lowest in the country. Its home values, however, fell by more than any other state.

The supply-driven relationship between foreclosure rate and home prices is broken. This is because buy-side demand for homes now exceeds new supply is most U.S. markets.  The inevitable result is higher prices everywhere.

Low mortgage rates, an expanded tax credit, and general optimism about housing should sustain demand through the winter.  Therefore, expect home values to continue to climb further.  If you plan to buy a home in 2010, consider moving up your time frame.

The best "deals" may the ones you get between now and the Super Bowl.

To get a feel for what mortgage rates and payments look like in your local market, with the details of your purchase. I may have some follow-ups for you, but it's a good place to start.  I respond to all of my own emails and I'm pretty quick about it, too. I can send a Good Faith Estimate upon request.

For the 7th consecutive month, the Case-Shiller Index showed a reduction in annual home price declines.  That's more than two seasons, folks. Surely, by now, we can say housing is in recovery.

And, even more impressive than the annual Case-Shiller figures are the monthly ones. 

According to the data, 17 of the 20 Case-Shiller markets improved between July and August 2009.  It's one fewer than last month's 18-of-20, but impressive nonetheless.

Market-by-market, the funk is ending. Home values are rising.

Lest we get carried away, let's remember that the Case-Shiller methodology is flawed:

1. It measures home values in just 20 U.S. cities.  Those 20 cities account for a paltry 9% of the U.S. population.
2. Its data is on a 60-day delay.  Case-Shiller doesn't reflect the "right now" of housing. It reflects the "just was".
3. It ignores the "all real estate is local" adage.  Case-Shiller lumps large metropolitan areas into one data reading.

Despite its flaws, however, the Case-Shiller Index remains relevant to housing.

See, as the economy progressively worsened throughout 2007 and 2008, Wall Street put the blame on housing, citing the Case-Shiller Index in support of the argument.  Analysts seemed to revel in the 33 percent drop in home values nationwide.

But now, as the Case-Shiller Index shows improvement, it's making a case that the economy is coming back from the brink.

An improving economy will harm home affordability.

Soon, government stimulus will fade, mortgage rates will rise, and sellers will regain the upper-hand in negotiations. Based on the Case-Shiller home value data, the "right time" to buy a home may have been in 7 months ago -- while the status of the recovery was still in doubt.

For a pre-approval letter for your next home, just and I'll get you started. You may have missed the market bottom, but this is definitely not the market top.  You may want to buy before the Case-Shiller runs its streak to a dozen.

Maybe now we can say that housing has bottomed?

After 3 years of disastrous data, 19 of the 20 markets tracked by Case-Shiller improved last month -- the 5th straight month of strong data and the index's strongest showing in 3-plus years.

This is definitely something for the news van.

That said, the Case-Shiller Index remains an imperfect gauge:

1. It's limited to 20 U.S. cities, representing just 9% of the U.S. population.
2. It's on a 2-month lag, reflective of how housing was, not how it is
3. It ignore locality, grouping city neighborhoods into one big lump.

Despite its flaws, though, the Case-Shiller Index remains relevant to an improving economy.

When housing cracks first started formed in 2005 and 2006, Wall Street doubled down its bets despite Case-Shiller calling for an all-out catastrophe of biblical proportions.  Turns out, both sides were wrong, but Case-Shiller earned a ton of street cred from its call.

Today, the Case-Shiller Index is the de facto barometer for home values nationwide.

Getting back to June data, because Case-Shiller says home prices are -- in its own words -- "on an upswing", we can assume it means good things for the housing market, in general.

For home buyers, however, the news may not be so welcome.  The combination of a soon-to-expire $8,000 First-Time Home Buyer Tax Credit and a rebounding housing market means that competition for properties should increase, creating bidding wars and higher home prices.

If you're on the fence about buying a home or wondering if the time is right, according to Case-Shiller, the "right time" may have been 2 months ago.  With prices on the upswing, homes may only get more expensive.

For a pre-approval letter, and I'll get you started.