US home prices increased 2.9 percent in the quarter ended June 30 after three years of declines, according to the latest S&P/Case-Shiller report, recording the first quarter-over-quarter price improvement in three years.

Home prices are down 14.9 percent compared with the same period last year but that is better than the record drop of 19.1 percent set in the first quarter of 2009.

David M. Blitzer, Chairman of the Index Committee at Standard & Poor's said "We're seeing some positive signs."

The Case-Shiller 20-city index increased quarter-over-quarter by 1.4 percent but dropped 15.4 percent year-over-year. p

The price declines may be over as prices have reached affordability levels not seen in a generation which draws many buyers into the market and make other potential buyers feel the urgency as they might miss the market bottom.

Cities with the biggest rebound compared with the first quarter of 2009 are Cleveland, topping the list with 9.8 percent improvement, followed by. Dallas and San Francisco with 6.5 percent and 5.9 percent increase.

Price drops were experienced in seven cities which include Las Vegas down 7.8 percent, together with Miami and New York with 2.2 percent and 1.2 percent declines respectively.

Despite the positive report, Robert Shiller, one of the principle authors of the Case-Shiller index, expressed caution as the turnaround may quickly fizzle out as what happened last year and that the government has not yet handled the foreclosure and increase in bank repossessions may cause added inventory which could dampen prices.