Home Prices Post First Gain in 3 Years (Updated)

Home prices rose 0.5% in May, their first monthly gain since the summer of 2006.
Publish date:

(Stock prices and Lennar downgrade added.)



) -- Home prices posted their first monthly increase in three years, adding to the growing list of positive housing data.

The Standard & Poor's/Case-Shiller home price index of 20 major cities rose 0.5% in May from April, the first monthly gain since July 2006.

While prices were still 17.1% below last year, 13 metro areas showed signs of improvement, compared with eight in April.

The biggest winner was Cleveland, where prices rose 4.1%. New York and Tampa, Fla., remained unchanged, while Las Vegas was the biggest loser, seeing prices fall 2.6%.

Home prices are just another hint that the worst of the housing-market mess could be over.

On Monday, the Commerce Department said

new home sales grew 11% in June

, and last week the National Association of Realtors reported

existing home sales jumped 3.6% in June


But shares of home builders were in the red Tuesday morning, after one of their brethren,


(LEN) - Get Report

, was downgraded by Citi.

Analyst Josh Levin lowered his rating on Lennar to hold from buy, saying its shares have grown more than its competitors and the overall market. While Levin doesn't foresee a slowdown in the near future, he says the sector still remains challenged.

Shares of Lennar fell 3% to $11.54 in morning trading,

Toll Brothers

(TOL) - Get Report

dropped 0.5% to $19.21 and


(NVR) - Get Report

, shed 1% to $614.25.

--Reported by Jeanine Poggi in New York.

Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.