Everyone knows that home prices have been steadily increasing since early 2012, but a new FNC report has found an interesting, complementary trend: foreclosure discounts.

An interesting thing has been happening in the housing market. Home prices, as we’ve reported on numerous occasions, have been rising steadily after bottoming in 2012’s first quarter, but a recent FNC report found a corresponding trend – discounts on foreclosures have also been falling during the same period.

The FNC Residential Price Index found that home prices in December hit a two-year high, and increased 5.4 percent in 2012; meanwhile, not only did foreclosures decline as a percentage of total home sales (down from 24.0 percent in December 2011 to 17.8 percent in December 2012), but the discounts needed to sell foreclosures have fallen as well. As FNC’s Foreclosure Market Report found, the average discount on a foreclosure property has fallen from 25 percent in 2009’s first quarter to 12.2 percent in 2012’s fourth quarter.

And that progress can be seen in the local markets, as Jack Haymes, an agent with Register Real Estate Services in Houston, explained.

“I am very confident where the market is headed today,” Haymes said. “Currently, we’re looking at a swing to the upside in the Houston area, and in my view, it will continue for a while. Home loan interest rates are at historical lows, and the foreclosures market is starting to slow, making this a perfect storm for the prime selling season.”

Check out our infographic below for more perspective on FNC’s data, and where the market seems to be heading.