Builders and the economy at large received more good news on Tuesday morning: Home prices increased in May compared to the previous month, according to the widely watched S&P/Case-Shiller home price indices.

The 10-city composite, which follows Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco, and Washington, D.C., increased 0.4% on monthly basis. Prices also inched upwards in Case-Shiller’s 20-city composite, which covers those same 10 cities, plus Atlanta, Charlotte, Cleveland, Dallas, Detroit, Minneapolis, Phoenix; Portland, Ore.; Seattle, and Tampa.

On an annual basis, both composites posted drops, with the 10-city index falling 16.8% compared to the same month one year ago and the 20-city index sliding 17.1% for the same period.

But the monthly gain, as small as it is, offers hope that housing has perhaps begun to recover.

“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,” said David M. Blitzer, chairman of Standard & Poor’s index committee. But he also cautioned index-watchers to remain calm. “While many indicators are showing signs of life in the U.S. housing market, we should remember that on a year-over-year basis home prices are still down about 17% on average across all metro areas, so we likely do have a way to go before we see sustained home price appreciation,” he said.

Las Vegas and Miami, for instance, continue to encounter soft prices, with their city’s index values  declining 2.6% and 0.8% on a monthly basis in May, according to Case-Shiller data, making them the weakest performers. Cleveland, in contrast, reported a 4.1% gain, which was the largest increase among the 20 cities covered.

Alison Rice is senior editor, online, at BUILDER magazine.

Learn more about markets featured in this article: Las Vegas, NV, Miami, FL, Cleveland, OH, Atlanta, GA.