A regulator says U.S. home prices rose in January, a favorable sign in the housing crisis.

Prices climbed 1.7% on a seasonally adjusted basis in January from the prior month, according to the Federal Housing Finance Agency on Tuesday.

December's previously reported 0.1% increase was revised to a 0.2% decline.

For the 12 months ended in January, U.S. prices fell 6.3%. The index is 9.6% below its April 2007 peak. The small increase in January suggests prices might stop their long descent and push consumers from the sidelines and into the purchase of a home.

The FHFA monthly index is calculated using purchase prices of houses backing mortgages sold to or guaranteed by Fannie Mae (FNM) or Freddie Mac (FRE).

-By Jeff Bater, Dow Jones Newswires; 202-862-9249; jeff.bater@dowjones.com