More reasons to be cautiously optimistic about the housing market: Housing prices increased through March, according to two major indices released Tuesday.

Home prices rose 0.9 percent on the month and 12.4 percent on the year in the S&P/Case-Shiller Composite Home Price Index. Of the 20 cities in the index, only New York saw falling prices.

Separately, the Federal Housing Finance Administration reported that prices rose 1.4 percent over the quarter and 7 percent on the year. The FHFA is the regulator in charge of the bailed-out mortgage businesses Fannie Mae and Freddie Mac and reports data from those companies as well as from other government agencies.

The gains in both the S&P/Case-Shiller index and the FHFA index were higher than analysts had expected.

As of March, according to S&P, home prices are back to their mid-2004 levels, and are roughly 20 percent below the record highs reached before the bursting of the housing bubble.

Those gains come despite a downturn in home sales from last year and warnings of potential problems in housing from top officials at the Federal Reserve and other government agencies.

"Slowing in home prices has been fairly modest, even as sales have shown clear weakening," wrote Jim O'Sullivan of High Frequency Economics in response to the S&P/Case-Shiller data, adding that "the pattern is consistent with the claim of realtors that the weakening in sales has been due in part at least to limited supply."

The good news is that data on sales of existing and new homes is already available for April. Inventories of homes for sale rose in April, which should allay worries about a lack of supply. Furthermore, sales have rebounded, although by less than expected. While sales remain well below the levels they reached last year, it's cause for encouragement that they have not stalled out completely following the rise in home prices and tightening of mortgage credit standards over the past year.

Nevertheless, the persistence of price gains through both the winter slowdown in economic activity and the growing supply of new housing inventory raises the concern that high prices may dissuade new buyers, slowing the number of purchases.