Home prices improved in May as reported in the S&P Case-Shiller Home Price Index showing vigorous spring sales attributed to homebuyer tax credits. Home prices were up 1.3 percent from April, and 4.6 percent compared to last years.

Although the increase in prices was a welcome development for the beleaguered housing market, S&P spokesman David Blitzer belittle the gain. "While May's report on its own looks somewhat positive, a broader look at home price levels over the past year still do not indicate that the housing market is in any form of sustained recovery," he said. "Since reaching its recent trough in April 2009, the housing market has really only stabilized at this lower level. The last seven months have basically been flat."

Home prices were at their highest in July 2006 and fell for 33 straight months before bottoming out in April 2009.

All but one of the 20 metro areas registered a price gain. Experiencing the decline was Las Vegas with a price fall of 0.5 percent in May.

Minneapolis had the largest rise with prices jumping 2.8 percent and was up 11.6 percent over the year.

San Francisco had the biggest year-over-year gain with 18.3 percent higher than May 2009. San Diego and Los Angeles have 12.4 9.7 percent increase respectively.

The number of Americans owning homes dropped in the second quarter of the year to a record low said the Census Bureau in a report.

According to the report, home ownership rate fell to 66.9 percent in the second quarter of 2010, down from first quarter’s ownership rate of 67.1 percent.

In the second quarter, the Midwest has the highest rate at 70.8 percent of people are homeowners, and was lowest in the West, where 61.4 percent of people own.

Rates in the West and South were below year ago levels, while the Northeast and Midwest stayed the same.

The vacancy rate in non-rental units also dropped in the second quarter, to 2.5 percent. Meanwhile, the vacancy rate in rental homes stayed the same at 10.6 percent.

Almost 86 percent of U.S. homes were occupied in the second quarter, with owner-occupied housing comprising 57.3 percent of all housing units while 28.3 percent were occupied by renters.

New home sales recovered in June from a record low in May but remained slow. New home sales increased 23.6 percent to a seasonally adjusted annual rate of 330,000 last month, up from a downwardly revised 267,000 in May, the Commerce Department reported Monday. Year-over-year sales fell 16.7 percent.

The June sales pace is the second lowest on record since the Commerce Department started tracking the data in 1963.

Home sales had increased in March and April as homebuyers scrambled to sign contracts ahead of the April 30 deadline for the tax credit. But sales dropped 40 percent in May, the first month after the incentive expired.

The median price of new homes sold in June was $213,400, down 1.4 percent from May and a 0.6 percent decline from June 2009.

Inventory at the end of June was estimated at 210,000 new homes. This was the lowest inventory in nearly 42 years. At current sales pace, it will take 7.6 months to sell through that inventory, down from 9.6 months in May. Considered healthy is a six months of new home inventory.

Regionally, sales improve the most in the Northwest with a 46 percent rise; in the South, sales increased by about a third, while sales in the Midwest rise 21 percent.

Sales in the Midwest, the only region to suffer a decline during the month was the Midwest with almost 7 percent fall.

Sales of existing homes fell in June and are expected to keep sinking showing renewed turbulence in the housing market as the tax credit expires and unemployment remains high.

Sales fell 5.1 percent last month to a seasonally adjusted annual rate of 5.37 million, the National Association of Realtors said Thursday. Year-over-year sales were up 9.8 percent.

June sales still captured some buyers who availed of the popular $8,000 tax credit, which was initially due to expire on June 30 but was extended September.

"The supply of homes on the market is higher than we'd like to see," said NAR chief economist Lawrence Yun, adding that home prices have held up well despite the glut.

The national median existing-home price for all housing types was $183,700 in June, up 1% from a year ago, according to NAR.

As sales have slowed, the inventory of unsold homes on the market has risen 2.5 percent to nearly 4 million. At current sales pace, that is a nearly nine-month supply, the highest level since August. Considered healthy inventory level is about six-month supply.

Applications for US home loans increased last week as rates on 30-year and 15-year fixed-rate loans dipped to their lowest levels on the survey's record.

The Mortgage Bankers Association said Wednesday overall applications were up nearly 7.6 percent compared to a week earlier. That incorporates an adjustment for the Independence Day holiday. Applications to refinance home loans rose 8.6 percent.

Refinance applications covered nearly 79.4 percent of total applications, the highest since April of last year.

The average rate for a 30-year fixed loan dropped to 4.59 percent last week and the rate for a 15-year fixed loan fell to 4.05 percent. Both were the lowest rates recorded since the MBA started conducting the survey since 1990.

The Mortgage Bankers Association's survey includes more than 50 percent of all mortgage applications in the US.