06/26/2012 11:13 EDT | Updated 08/26/2012 05:12 EDT

Home prices rise in most U.S. cities

Average home prices in the U.S. rose more than expected in April — yet another sign that the beleaguered U.S. housing market has turned a corner and is rebounding.

On a seasonally-adjusted basis, the Standard & Poor's/Case-Shiller home price index showed prices gained 0.7 per cent from March to April. Economists had expected a gain of 0.4 per cent.

San Francisco, Washington and Phoenix recorded the biggest month-over-month increases. The only city to record a monthly drop was Detroit.

On a non-seasonally adjusted basis, the index rose 1.3 per cent in April — its first monthly gain since last fall.

"It's been a long time since we enjoyed such broad-based gains," said David Blitzer, chairman of the index committee at S&P.

"While one month does not make a trend, particularly during seasonally strong buying months, the combination of rising positive monthly index levels and improving annual returns is a good sign."

April's increases still leave average home prices in the U.S. 1.9 per cent lower than they were a year ago. But that's an improvement from the 2.6 per cent drop that was seen in March. Prices in 10 of the 20 cities were up on a year-over-year basis.

Despite the gains, U.S. home prices remain 34 per cent below their pre-recession peak. Sales are also well off the levels seen in 2006.

On Monday, the U.S. government reported that sales of new homes in May rose at their fastest rate in almost two years, with sales jumping nearly 20 per cent compared with the same period in 2011.