House prices rose across the board in 20 metropolitan areas in May, with Phoenix seeing the largest increase

House prices across 20 metropolitan areas rose across the board in May, with Phoenix seeing the largest increase The S&P/Case-Shiller house price index increased by 2.2% in May, higher than economists...

House prices across 20 metropolitan areas rose across the board in May, with Phoenix seeing the largest increase The S&P/Case-Shiller home price index rose 2.2% in May, higher than economists' forecasts, with prices in all 20 of the nation's largest metropolitan areas rising from April. What's more, home prices in 12 of the metropolitan areas are higher than a year ago, showing that improvements in the real estate market are far from fleeting. The overall housing price index in 20 cities fell by only 0.7% compared with the same period last year. The biggest gains came in Phoenix, where home prices were up 11.5% from last year, and the worst-performing city was Atlanta, where home prices fell 14.5%. "This reversal in housing prices is unexpected," said Newport, an economist at IHS Global Perspectives. When the federal government and almost all state governments in the United States reached a settlement with major lenders in foreclosures in February this year, it was generally expected that a large number of foreclosures would appear on the market, forcing housing prices to fall further. But this did not happen. In addition to Phoenix, other cities hit hard by the housing crisis have also recovered. Home prices in Tampa and Miami, Florida, both rose 3%. Despite the recovery, Phoenix home prices are down more than 50% from their 2006 peak. House prices in the casino city of Las Vegas fell by more than 60%. The largest monthly gains were in Chicago, where home prices increased 4.5% from April, with Atlanta ranking second. "We have observed two consecutive months of rising home prices and overall improvement month over month and year over year," said S&P Dow Jones Indices Committee Chairman Breeze. "However, spring and early summer are seasonal hot selling periods, so it is important to continue to monitor housing market trends throughout the summer and into the fall." Newport also pointed to a number of other positive housing market recovery indicators recently. New housing starts bottomed out in the fourth quarter of 2011; housing investment has assisted GDP growth for five consecutive months; the Federal Housing Finance Agency's May house price index rose 3.7% from the same period last year, above the inflation rate; and according to forecasts from Bank of America Merrill Lynch and other economists, housing is expected to help economic growth this year for the first time since the Great Recession. Home prices have fallen about 35% from their peak, and 2.2 million construction jobs have been eliminated nationwide since 2007, including 455,000 residential construction jobs. Merrill Lynch predicts that home prices will remain flat this year and will increase by 5% nationwide by 2015.