Index of 20 major cities rises on a monthly basis for the first time since July 2006, hinting that the worst of the declines may be over.

The value of U.S. homes grew on a monthly basis in May for the first time in nearly three years, according to 20-city index released Tuesday.

The month-over-month increase was 0.5%, according to Standard & Poor’s and economists Case-Shiller. It was the first increase in the monthly index since July 2006.

The Cabot Homes Group is encouraged to see movement in a positive direction. To our clients looking to buy a home we see an opportunity to purchase at historically low prices with some confidence that we are on the upswing in pricing.

The improvement in the index was as broad as it was deep, with 13 metro areas showing gains. While Fort Lauderdale and Miami Metro aren’t specifically referenced in the report, The Cabot Homes Group has seen similar growth in this highly desirable corridor as foreclosures have stabilized and Cabot Home Group clients have taken advantage of historically low prices and mortgage rates.

The report added to the list of positive housing market indicators. These include rising new home sales, increased home building and increased pending sales.

Its important to note that this is only a single month and note a trend. But prices have fallen so far in so many places that it’s drawing people back into the market. So much so that Cabot Homes Group is optimistic that those sitting on the sidelines will be encouraged by this good news.

So what’s behind the good news?

Stabilizing the housing market has been a primary goal of Washington policy makers. To that end Congress has tried to stimulate home buying by creating a temporary tax credit of $8,000 for people who have not owned a home for at least three years.

Also, interest rates were very low in May, which also could have helped the housing market. The rate for a 30-year mortgage was well below 5% during the month, which encouraged buyers and drove up demand.

Its encouraging to think we could be coming to the end of the slump, at least as far as the decline in housing prices goes. If that’s the case it means there are some real home bargains on the market now. If your renting or waiting to buy now maybe the time to talk to your Cabot Homes Group associate about your share of the American dream.