Home prices are picking up across the country, even increasing by the highest percentage in seven years, according to two new reports, as the supply of houses on the market dwindles.

Prices rose by 2.5 percent in June from a year ago and by 6 percent from the previous quarter, according to CoreLogic Inc., a Santa Ana, Calif.-based data firm, The Wall Street Journal reports.

The quarterly jump was the largest since 2005.

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Meanwhile, Freddie Mac, which computes price averages using a different methodology, reported that home prices during the second quarter jumped by 4.8 percent from the previous quarter, the largest such gain since 2004.

"At the halfway point, 2012 is increasingly looking like the year that the residential housing market may have turned the corner," says Anand Nallathambi, chief executive of CoreLogic.

"While first-half gains have given way to second-half declines over the past three years, we see encouraging signs that modest price gains are supportable across the country in the second-half of 2012."

A shrinking inventory is the reason for the gain in prices, as less homes are hitting the market.

Construction on new homes has remained depressed for recent years, while many owners are renting their houses out, which keeps more houses out of the market.

Meanwhile, cheap financing is bringing more qualified buyers into the market eager to buy from a shrinking pool of homes.

"There's not enough supply, given higher levels of demand," says Ivy Zelman, chief executive of Zelman & Associates, a research firm, The Journal reported, adding she revised her 2012 price forecast to a 5 percent gain from a 1 percent decline made earlier this year.

"With every passing month, distressed homes are being absorbed at better and better prices."

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