Home prices appear to be stabilizing, according to the S&P/Case-Shiller Home Price Indices released Tuesday morning.

The 10-City and 20-City composites indices were down 16.8% and 17.1%, respectively, in May compared to the same month last year. But the declines were lower than those of April, when the 10- and 20-City indices were down 18.0% and 18.1%, respectively, on a year-over-year basis.

Moreover, both indices showed price gains from April to May, 0.4% for the 10 City and 0.5% for the 20. After 16 consecutive months of record annual declines, beginning in October 2007, the indices have now shown four consecutive months of improvement in annual returns.

"The pace of descent in home price values appears to be slowing," said David M. Blitzer, chairman of the Index Committee at Standard & Poor's. "There is a clear inflection point in the year-over-year data, due to four consecutive months of improved rates of return, after the steep decline that began in the fall of 2005."

Said Blitzer, "To put it in perspective, these are the first time we have seen broad increases in home prices in 34 months. This could be an indication that home price declines are finally stabilizing."

Blitzer warned, however, that prices are still down 17% on average year-over-year, so "we likely do have a way to go before we see sustained home price appreciation."

Prices are now at mid-2003 levels. From the peak in the second quarter of 2006, the 10-City Composite is down 33.3% and the 20-City Composite is down 32.3%.

All the metro areas and the two composites remain in negative territory, with 16 of the 20 metro areas reporting double digit declines. Las Vegas (109.49), Los Angeles (159.18), Miami (144.59), Phoenix (103.56), Seattle(148.96) and Tampa (140.35) posted their lowest index levels in May since their respective peaks. (The index is based on a value of 100 established in January of 200.) From peak to trough Phoenix and Las Vegas are the worst off, down 54.5% and 53.4%, respectively.

Dallas (+1.9% April-to-May) and Denver (+1.3%) have reported three consecutive months of positive returns. Atlanta (+0.3% April-to-May), Boston (+1.6%), Cleveland (+4.1), San Francisco (+1.4%) and Washington D.C. (+1.3%) each reported two consecutive months of positive returns. Eight of the 13 MSAs reporting positive monthly returns for May were greater than+1.0%. But Las Vegas was down another 2.6% from April to May, Los Angeles down 0.1%, Miami down 0.8%, Phoenix down 0.9% and Seattle down 0.3%. New York was flat month-to-month and is down 12.2% from last May.