Strong home price gains among the nation’s largest cities continue to fuel annual growth, according to S&P/Case-Shiller Home Price Indices, in January seeing the highest uptick since the housing bubble burst. 

In the last 12 months ending in January 2013, average home prices increased 7.3% for the 10-City Composite and 8.1% for the index’s 20-City Composite. 

All 20 cities posted year-over-year gains, notes S&P, with Phoenix leading the charge with a gain of 23.2%. Of these cities, 19 showed acceleration in their year-over-year returns, with Detroit being the only city to show a deceleration.

The monthly increases among the index’s 10- and 20-City Composites were modest compared to the yearly gains, climbing 0.2% and 0.1%, respectively. 

In January 2013, nine cities and both Composites posted positive monthly returns. Dallas was the only metropolitan statistical area where the level remained flat, notes the index.

“The two headline composites posted their highest year-over-year increases since summer 2006,” says David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. “This marks the highest increase since the housing bubble burst.”

Adding to the growing optimism of rising home prices are the performances of certain cities that had been hit hard by the housing bust, suggests Blitzer. 

Places such as New York, which finally came into positive territory in January after 28 months of negative annual returns, as well as the Southwest (Phoenix and Las Vegas), San Francisco, Atlanta and Dallas posted their highest year-over-year gains, writes S&P. 

“Economic data continues to support the housing recovery. Single-family home building permits and housing starts posted double-digit year-over-year increases in February 2013,” says Blitzer. 

Despite a slight uptick in foreclosure filings, says Blitzer, numbers are still down 25% year-over-year.

Written by Jason Oliva