Home prices nationwide, including distressed sales, increased on a year-over-year basis by 5 percent in September 2012 compared to September 2011, according to a new report from real estate data firm CoreLogic.  This change represents the biggest increase since July 2006 and the seventh consecutive increase in home prices nationally on a year-over-year basis.

All but seven states experienced year-over-year price gains according to the firm’s data, including Massachusetts, which it said had a 2.5 percent increase.

Excluding distressed sales, home prices nationwide also increased on a year-over-year basis by 5 percent in September 2012 compared to September 2011. On a month-over-month basis excluding distressed sales, home prices increased 0.5 percent in September 2012 compared to August 2012, the seventh consecutive month-over-month increase. Distressed sales include short sales and real estate owned (REO) transactions. In Massachusetts, prices were up 3.4 percent excluding distressed sales, according to CoreLogic.

"Home prices are responding to better market fundamentals, such as reduced inventories and improved buyer demand," said Anand Nallathambi, president and CEO of CoreLogic, in a statement. "So far this year, we’re seeing clear signs of stabilization and improvement that show promise for a gradual recovery in the residential housing market."

Based on its index of pending sales, the firm expects similar price increases for October.

Including distressed sales, the five states with the highest home price appreciation were: Arizona (up 18.7 percent), Idaho (13.1 percent), Nevada (11.0 percent), Hawaii (8.9 percent) and Utah (8.7 percent).

Including distressed sales, the five states with the greatest home price depreciation were: Rhode Island (-3.5 percent), Illinois (-2.3 percent), New Jersey (-1.8 percent), Alabama (-1.3 percent) and Delaware (-0.5 percent).