Home prices up for 1st time in 3 years

The value of U.S. homes grew on a monthly basis in May for the first time in nearly three years, according to 20-city index released Tuesday. The month-over-month increase was 0.5%, according to the report from financial data company Standard & Poor’s and economists Case-Shiller.

It was the first increase in the monthly index since July 2006. On an annual basis, home prices in the 20 cities fell 17.1%, but it was the second straight month that the year-over-year decline lessened.

While acknowledging that the report was good news, Mark Zandi, chief economist for Moody’s Economy.com, downplayed the importance of a single month’s statistics. “I think it’s a temporary respite,” he said. “It reflects the recent decline in foreclosure sales, and prices will continue to fall over the next several months.”

Cleveland gains: The improvement in the index was as broad as it was deep, with 13 metro areas showing gains, compared with eight in April. Two, New York and Tampa, Fla., showed no change. The biggest winner was long-suffering Cleveland, where prices rose 4.1%. The city where prices continue to decline the most remains Las Vegas, where prices declined 2.6%.

The report added to the list of positive housing market indicators. These include rising new home sales, increased home building and increased pending sales.

Source: CNNMoney.com

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