So there’s a housing recovery going on? Maybe. It depends upon which numbers you pay attention to. But if you take a look at home prices, you’ll notice they’re still on a gradual recovery.

According to S&P’s Case-Shiller home price index for home prices upSeptember, the latest release from the firm, it reflects a 0.7 percent gain from August to September and up 13.3 percent compared to the same period as last year. That itself is the largest year over year gain since February 2006. What’s up with all those numbers?

The price increase is one in a series and while the price gains were up modestly at 0.7 percent, that’s still lower than the 1.3 percent increase covering the July to August time frame. There is a decrease in inventory nationally which may keep prices higher than otherwise and it’s a fact not going unnoticed by the homebuilders, who filed building permits to their highest level in almost 5 ½ years to a seasonally adjusted 6.2 percent increase.

Fewer homes, more starts and rising prices. It typically takes less than a year to build a new home so the immediate impact on inventory won’t be felt until those homes come under contract and sold. This combination of data could increase the likelihood of a Fed tapering sooner rather than later and there are likely many on the Board who are waiting for a “preponderance of evidence” to go ahead and begin the Fed stimulus pullback.

These numbers will also be viewed against next week’s release of the Unemployment Report for November. With any stronger than expected showing of job creation, an announcement of the Fed ending its quantitative easing program would be more than expected at their next round of meetings in January.