Home prices have seen bottom, at least according to a recent Clear Capital report that projects a flatline for the housing market going into 2012, with several regions seeing a slow increase.

Clear Capital’s monthly home price index shows an average increase of .3% quarter-over-quarter, with REO saturation near 25%. Additionally, the report notes, price movements across the country have become more narrow with just 2 percentage points separating the highest performing region (the Midwest, +1.2%) from the lowest (West, -0.8%).

“The overall market stability in this month’s report gives me hope that housing markets are settling after a very turbulent two years,” said Dr. Alex Villacorta, Director of Research and Analytics at Clear Capital. “With only a one percent drop in national home prices since January and virtually no change in prices over the last six months, strong evidence suggests the big swings that many market participants are accustomed to could become a thing of the past.”

Year-over-year home prices are still down 2.2%, Clear Capital reported, showing a slight increase over last month’s report (-2.8%).

“Although many of the nation’s major markets are experiencing no significant movement in prices, there are still several micro markets that are underperforming the overall market due to high levels of REO saturation,” Villacorta said. “As lien holders continue to process their foreclosures and the flow of REOs continue to come to market, it will be critical for industry participants to ensure they understand the micro economic nature of specific markets.”

Regionally, the highest performing markets were Washington, D.C., Hartford, Conn. and Denver. Regions with the biggest losses were Atlanta, Seattle and Memphis.

View the Clear Capital report.

Written by Elizabeth Ecker