Prices are still well below what they were a year ago, but studies have shown improvement in many cities across the country. Annual returns are up between 6.4% and 7.3% as compared with last October. That statistic follows nine months of improvement since the beginning of 2009.

Analysts at the S&P are confident that slowing growth in prices does not indicate a second decline. The last time such an event was noted was in the early 1980′s when Fed policy was not “stable and consistent” as it is today, according to David Blitzer chairman of the S&P’s index committee.

He noted further that sales of existing homes have been strong lately gradually lowering the supply of houses for sale. However he cautioned that housing starts remain weak and a looming supply of foreclosures threaten to imperil investor confidence.

The S&P report noted that growth in two cities in particular, Phoenix and San Francisco was greater than 1%, significantly higher than the other cities studied. Other portions of the country such as the mid-West are no longer reporting double digit declines, while Denver and Dallas are nearly in positive territory.