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Real Estate Agent with Keller Williams Elite

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For the first time in nearly three years, home prices nationwide rose slightly month-over-month, according to a key indicator of the housing market. However, home prices remain well below their already-distressed 2008 levels.

According to the S&P/Case-Shiller Home Price Index, housing prices in the nation's 20 largest metropolitan areas rose 0.5% in May compared to prices in April, led higher by price gains in the nation's most resilient housing markets of Cleveland, Dallas and Denver.

While housing prices month-over-month increased, the pace of annual declines remains at a steep 18% compared to a year ago. However, the pace of annual declines has now recovered moderately over a period of four months from a near 20% decline annual pace reported earlier this year.

While quite hesitant, economists said that it seems that there's been enough data to show that the housing market is at least recovering and quite possibly bottoming in some parts of the nation.

Some of the most troubled metropolitan areas of the nation continue to suffer from month-over-month home price depreciation. Phoenix, where home prices plunged the most since the boom of 2007, saw home prices fall 0.9% in May. Annually, Phoenix is down 34.2% from a year ago.

Las Vegas saw a steep 2.6% decline in housing prices in May, bringing the one-year change for that market down to 32%. Las Vegas housing prices are down 53.4% from the 2007 peak -- barely trailing Phoenix's peak-to-trough drop of 54.5%.

The places were home prices actually appreciated during the month were in metropolitan areas where home prices never plunged that much in the first place: Boston, Denver, Dallas and Cleveland. The Ohio city saw home prices appreciate by 4.1% in May, with a year-over-year change remaining at a negative 6.2% from a year ago. Dallas remains the most resilient housing market, with housing prices down a relatively modest 4.1% from a year ago.

"The index really is pointing to a fundamental improvement," said Abiel Reinhart with JPMorgan Chase & Co.

Shares of some of the nation's home builders - Lennar (LEN: 11.29, -0.58, -4.89%), Toll Brothers (TOL: 19.2, -0.1, -0.52%), Centex (CTX: 10.25, -0.028, -0.27%), and Pulte Homes (PHM: 10.58, -0.02, -0.19%) - were either moderately lower or unchanged in Tuesday trading. They were up considerably on Monday after the U.S. Commerce Department's better-than-expected June new home sales data.

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