(Newsroom America) -- National home values rose for the third month in a row, climbing 0.5 percent from April to a Zillow Home Value Index of $148,100.
While home values continued to decline on an annual basis, falling 0.9 percent from May 2011 to May 2012, this is the smallest year-over-year decline since October 2007, according to the May Zillow Real Estate Market Reports.
National rents also rose from April to May, increasing 1.8 percent, according to the Zillow Rent Index. Rents rose on a monthly basis in 77 percent of the 344 markets covered by Zillow.
Home values continued their rapid increase in the Phoenix metro, rising 9 percent annually, and 1.9 percent from April to May. In the Miami-Fort Lauderdale metro, home values rose 5.2 percent year-over-year and 2.2 percent month-over-month.
"It is promising to see consecutive months of national home value increases, especially during a period in which we'd expected more downward pressure due to foreclosures," said Zillow Chief Economist Dr. Stan Humphries.
"Attention has now shifted to the tug-of-war situation with inventory, where buyers want to buy but sellers don't want to – or can't – sell. This inventory phenomenon, due to both the broader issue of negative equity that is keeping people in their homes and to rational seller behavior at a market bottom, will make for a more volatile housing recovery than what we initially expected."
Foreclosures continued to decline in May, with 6.3 out of every 10,000 homes in the country being foreclosed. That was down from 7.2 out of every 10,000 in April.