After more than a year of rapidly escalating home prices, a new housing report shows that prices increased just 0.9 percent from July to August. Moderation of home price increases, which have led some economists to predict another nascent real estate bubble, may provide stability for furthering the mild gains garnered by the housing market this year.

Home prices continued to increase in August, but the overheated pace of earlier months has begun to cool, housing industry analytics firm CoreLogic said in an October 1 report. CoreLogic's Home Price Index (HPI), including distressed sales, rose 0.9 percent from July to August, and was 12.4 percent above the HPI in August 2012. This was the 18th consecutive month in which prices were higher than in the same month the year before, CoreLogic said.

"Home price gains were negligible month-over-month in August – an expected decrease in the pace of appreciation as housing enters the off-season," said Dr. Mark Fleming, CoreLogic's chief economist. "While prices increased more than 12 percent on a year-over-year basis, the month-to-month change is more telling of this year's late summer trend."

Every state posted an HPI increase, whether distressed sales were included or not. The annual rate of increase, including distressed sales, was highest in Nevada (+25.9 percent), California (+23.1 percent), Arizona (+16.4 percent), Wyoming (+15 percent) and Georgia (+14.8 percent). When distressed sales were excluded, Nevada, California, and Wyoming still lead with increases of 23.4 percent, 19.8 percent, and 14 percent respectively, and Utah (+13.7 percent) and Florida (+13.5 percent) rounded out the top five.

"After a strong run, the rate of home price appreciation slowed in August. In addition to normal seasonality, the recent sharp rise in mortgage rates off their historic lows was a clear driver behind the slowdown," said Anand Nallathambi, CoreLogic president and CEO. "We anticipate moderate gains in home prices over the balance of this year, supported by the recent downward trend in rates and continued tight supplies of homes in many markets."