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In more evidence that the housing market is recovering, the latest Case-Shiller/S&P Home Price Index shows that prices in most metro areas covered by the survey increased again in August, as compared to a year ago. The Index recorded a 1.2% average price gain in the 20 cities it covers, the fourth straight month that prices have climbed.

As with last month, the Minneapolis and San Francisco metro areas paced the increase, rising 3.2% and 2.8% respectively. Chicago, Los Angeles, Phoenix, and Washington D.C. all posted price gains of over 1% for August.

Despite the seeming strength coming back to the housing market, many analysts caution that the rise in prices may be temporary. Unemployment remains high, another wave of foreclosures may be in the offing, and an $8,000 first-time home buyer tax credit is scheduled to expire soon.

Some housing experts expect home prices to recover incrementally, following the pattern of the last few months. Getting back to the mid-2006 in home prices may still be a long way away.

The Case-Shiller index is widely considered one of the most accurate gauges of home prices because it compares recent home sales with previous prices for the same home. Last month the Index rose 1.6%.

If you have been sitting on the sidelines waiting for the housing market to reach rock-bottom, now may be the time to move. After plunging the last three years, home prices have gotten low enough to entice buyers back into the market. That is starting to stabilize prices and some analysts now think the worst may be over.

A recently released Case-Shiller Price Index, compiled by Standard & Poor’s, shows that eight cities had price increases in May, compared to four in April and only one in March. Chicago, Cleveland, Denver and San Francisco are among the markets posting gains.

Significantly, this is the first time since early 2007 that the composite Case-Shiller index of 20 major cities was essentially flat, instead of down. This is on the heels of earlier reports showing that sales of existing homes rose in June for the third consecutive month. In addition, sales of new homes rose in June by the largest percentage in eight years.

As the economy emerges from recession, the real estate market should continue to improve, although skeptics warn that rising unemployment, another jump in foreclosures or a big increase in interest rates could halt the forward momentum.