If you have been waiting for a bottom in the US real estate market to decide whether or not to jump in, this may be the signal you've been waiting for. 

Home prices showed the smallest annual decline in almost three years in January, indicating there are surprising areas of strength in the housing market.

The Standard & Poor's/Case-Shiller 20-city home price index fell just 0.7 per cent from last year on a seasonally adjusted basis. The index reading of 146.32 was almost in line with analysts expectations, according to a survey by Thomson Reuters.

Better still, prices rose 0.3 per cent from December to January, the eighth consecutive monthly gain. Among the 20 cities in the index, 12 rose.

The index, released Tuesday, is up nearly 4 per cent from its bottom in May, 2009, but still almost 30 per cent below its May, 2006, peak.