Home prices continued their rise across the country over the last 12 months, according to the S&P/Case-Shiller Home Price Indices that incorporates data through February 2015.

Both the 10-City and 20-City Composites saw larger year-over-year increases in February compared to January. The 10-City Composite gained 4.8% year-over-year, up from 4.3% in January.

The 20- City Composite gained 5% year-over-year, compared to a 4.5% increase in January.

The S&P/Case- Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.2% annual gain in February 2015, weaker than the 4.4% increase in January 2015.

“Home prices continue to rise and outpace both inflation and wage gains,” said David Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The S&P/Case-Shiller National Index has seen 34 consecutive months with positive year-over-year gains; all 20 cities have shown year-over-year gains every month since the end of 2012.

“While prices are certainly rebounding, only two cities – Denver and Dallas – have surpassed their housing boom peaks. Nationally, prices are almost 10% below the high set in July 2006. Las Vegas fell 61.7% peak to trough and has the farthest to go to set a new high; it is 41.5% below its high. If a complete recovery means new highs all around, we’re not there yet,” Blitzer said.

Denver and San Francisco reported the highest year-over-year gains, as prices increased by 10.0% and 9.8%, respectively, over the last 12 months.

“Home prices are continuing the familiar narrative – showing modest annual gains and slow, healthy, monthly increases,” said Quicken Loans vice president Bill Banfield. “Employment remains one of the most watched issues impacting the housing market as there are concerns of price increases outpacing wage growth.”

It was the first double-digit increase for Denver since August 2013. Seventeen cities reported higher year-over-year price increases in the year ended February 2015 than in the year ended January 2015, with San Francisco showing the largest acceleration. Three cities -- San Diego, Las Vegas and Portland, OR -- reported that the pace of annual price increases slowed.

“Home value growth seems to have stabilized, a positive development overall, but also one that sheds light on an unchanging and ugly remnant of the housing crisis: Negative equity,” said Zillow Chief Economist Stan Humphries. “As home value appreciation flattened, the negative equity rate also stabilized over the second half of last year. Roughly 17% of homeowners with a mortgage were underwater as of the end of last year, owing more on their home than it is worth, unchanged from the prior quarter.

“Negative equity is likely to remain a persistent feature of the housing market for years, particularly among the kinds of less expensive, entry-level homes so attractive to younger buyers. And as long as there is negative equity, the market can count on elevated numbers of short sales and foreclosures, localized price spikes and inventory shortages,” Humphries said. “As we enter this new normal, negative equity may return as a heated topic of concern to policy makers given its stubborn refusal to go gently into that good night.”

One economist thinks the Case-Shiller index is underestimating the strength of the market.

“The modest 0.4% m/m rise in the Case-Shiller national house price index in February pulled the annual rate of house price inflation down to 4.2%, from 4.4% in January, and suggests that price pressures eased at the start of the year,” writes Ed Stansfield, chief property economist at Capital Economics. “However, annual price growth in the narrower 20-City measure accelerated to 5.0%, while the timelier CoreLogic index has suggested that price growth surged from 4.7% in December to 5.6% in February. ?

“Given these conflicting signals it is difficult to gauge the true strength of the market. However we suspect it may be a little stronger than the national Case-Shiller index, if not quite as strong as the CoreLogic index suggests,” Stanfield says in a client note. “After all, housing is no longer significantly undervalued, and the Fed is likely to begin raising interest rates later this year, both of which argue against a rapid upturn in house price pressures. That said, we do expect the recent tightness in supply, the upturn in home sales – to a 20-month high – as well as the strength of the labor market to cause a gradual acceleration in price growth to around 6.5% this year.”

On a monthly reading, the National Index rebounded in February, reporting a 0.1% change for the month. Both the 10- and 20-City Composites reported significant month-over-month increases of 0.5%, their largest increase since July 2014. Of the sixteen cities that reported increases, San Francisco and Denver led all cities in February with increases of 2.0% and 1.4%. Cleveland reported the largest drop as prices fell 1.0%. Las Vegas and Boston reported declines of -0.3% and -0.2% respectively.

 “A better sense of where home prices are can be seen by starting in January 2000, before the housing boom accelerated, and looking at real or inflation adjusted numbers. Based on the S&P/Case-Shiller National Home Price Index, prices rose 66.8% before adjusting for inflation from January 2000 to February 2015; adjusted for inflation, this is 27.9% or a 1.7% annual rate,” Blitzer said. “The highest price gain over the last 15 years was in Los Angeles with a 4.3% real annual rate; the lowest was Detroit with a -3.6% real annual rate. While nationally, prices are recovering, new construction of single family homes remains very weak despite low vacancy rates among both renters and owner-occupied homes.”