Home prices rise for first time in three years

07.29.09
By James Conroy

New figures released this week suggest that people considering buying a house may want to consider applying for a home loan soon as home prices are rising for the first time in almost three years.

According to the S&P/Case-Shiller Home Price Index, prices of homes in the 20 cities the index surveys rose 0.5 percent in May. While that may seem like a small increase, it marks the first time the index has risen since July 2006.

While some argue that it's too early to celebrate the end of the recession and a return to stability in the housing market, the 17.1 percent drop in housing prices over the last year may have consumers considering home purchases.

Still, analysts like Mark Zandi, chief economist at Moody's Economy.com said May's numbers may be an aberration.

"I think it's a temporary respite," he told CNNMoney.com. "It reflects the recent decline in foreclosure sales, and prices will continue to fall over the next several months."

The rise in home prices is yet another shot in the arm for the struggling home sector as the Commerce Department announced this week that the sale of new single-family homes increased 11 percent in June.

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May home prices increased for the first time in almost three years