Home Prices Rise for Second Straight Month

Home prices rose for the second month in a row in May, with increases posted in all four major regions of the United States, according to the monthly IAS360 Home Price Index.

Prices nationwide rose by an average of 1.6 percent, the biggest monthly increase in four years and following a 0.4 percent increase in April, according to the survey by foreclosure management and disposition company Integrated Asset Services. Monthly gains were also posted in nine of the nation's 10 largest metropolitan areas, with only Las Vegas showing a decline.

"Two month's worth of positive data hardly signals a turn in the national housing market," said Dave McCarthy, IAS president and CEO. "But we have to be encouraged by what we're seeing in several important counties and neighborhoods."

The price increase was attributed to a declining proportion of sales of foreclosed properties in declining neighborhoods and an increase in traditional home sales driven by low prices and tax credits. At the same time, it was noted that foreclosures continue to exert considerable downward pressure on home prices overall.

National home prices still remain 10.5 percent below their average of one year ago, and 13.7 percent below their peak in 2006, the survey reported. Monthly average prices posted their biggest increase in the Northeast, which was up 3.2 percent over April. The West, which was the only region to post a decrease in the April survey, was up by 0.9 percent in May, the smallest monthly gain of the four regions.

One of the most striking figures from the survey was the fact that nine of the nation's 10 largest metropolitan areas posted gains in May, a complete reverse from two months earlier, when the same ratio posted declines. Boston led all 10 major metro areas with a 3.7 percent monthly gain while West Coast cities San Francisco and Los Angeles, which have seen some of the biggest declines in the housing crisis, held the number two and three spots with gains of 3.0 and 2.8 percent, respectively.

The IAS360 House Price Index is based on a monthly assessment of media sales prices of detached single-family residences in 360 U.S. counties, tracking data from 15,000 neighborhoods.