Home prices were up for the third consecutive month in May as measured by CoreLogic's Home Price Index (HPI.)  The three months of increases were noted for both annual and month-over-month numbers.

The HPI increased by 1.8 percent compared to April figures and was 2.0 percent higher in May 2012 than in May 2011.  Those numbers are for all home sales including those of distressed homes, both short sales and real estate owned (REO) transactions.

When distressed sales are removed from the calculation home prices were up year-over-year by 2.7 percent and were 2.3 percent higher in May than in April.  This is the fourth consecutive month-over-month increase.

CoreLogic's forward-looking Pending HPI which is based on Multiple Listing Service data measuring price changes in the most recent month indicates that house prices, including distressed sales, will rise by at least 1.4 percent from May to June and by 2.0 percent if distressed sales are not included.

"The recent upward trend in U.S. home prices is an encouraging signal that we may be seeing a bottoming of the housing down cycle," said Anand Nallathambi, president and chief executive officer of CoreLogic. "Tighter inventory is contributing to broad, but modest, price gains nationwide and more significant gains in the harder-hit markets, like Phoenix."

"Home price appreciation in the lower-priced segment of the market is rebounding more quickly than in the upper end," said Mark Fleming, chief economist for CoreLogic. "Home prices below 75 percent of the national median increased 5.7 percent from a year ago, compared to only a 1.8 percent increase for prices 125 percent or more of the median."

Since home prices peaked in April 2006 the national HPI including all sales has fallen 30.1 percent and non-distressed sale prices are down 22.2 percent.

The highest price appreciation including distressed sales was seen in Arizona (12.0 percent), Idaho (9.2 percent) and South Dakota (8.7 percent).  When distressed sales are excluded the greatest appreciation was noted in Montana (9.1 percent), South Dakota (8.5 percent), and Arizona (7.3 percent).