The housing market got another boost this morning, as July’s S&P Case/Shiller Home Price Index registered its biggest monthly increase in almost four years. The 20-city index rose 1.2% in July from the month before, the biggest jump since October 2005, according to Bloomberg.

Even though the monthly price figures have been increasing now for the last few months, year-over-year prices are still down. However, declines are becoming less severe.

And the debate continues as to whether this reflects a legitimate housing recovery or whether the Case/Shiller data — which is not seasonally adjusted — is simply reflecting the strong summer buying season, made stronger buy vast government support and banks’ reticence to list their inventory of REO properties.

As the months roll on, we’ll be keeping a careful on eye on the data to try and determine just how real this recovery is. And remember, Case/Shiller data lags, here we are almost to October and just now finding out what happened in July!

Broad measures of home prices continue to show improvements, as the S&P/Case Shiller Home Price Index registered its second straight monthly increase. According to the Wall Street Journal, Case Shiller’s 20-city index ticked up on a quarterly basis 1.4% from the three months ending May 31.

2 cities still showed month-over-month declines, woeful Detroit and Las Vegas. The only cities showing single digit annual declines, Dallas, Cleveland, Denver, Boston and Charlotte, were some of the markets that held up longer than most, and are still in the early stages of their price correction.

Yale’s Robert Shiller, who along with Carl Case devised the Case-Shiller Home Price Index, warns that despite the positive data, foreclosures and job losses could still hamper any legitimate housing recovery. Mortgage defaults, especially in the Prime market, continue to rise, which is leading to increased inventory and falling prices in high-end real estate markets around the country.

The experts at Cirios Real Estate are watching the data closely, especially as the summer buying season shuts down and we move into the traditionally slow fourth quarter. This transition will be the first true test of this housing “recovery.”