The FHFA monthly index is calculated using purchase prices of houses purchased with loans that have been sold to or guaranteed by Fannie Mae or Freddie Mac. It is a repeat-sales index similar to the Case-Shiller index, but limited to GSE loans.
The second graph shows each month's house price index compared to the same month a year earlier:
June 2012 was the 5th month in a row during which the house price index rose year over year, following 52 months of year-over-year declines.
This report is just the latest home price index showing accelerating growth in home prices in the US and regionally.