Home Prices Rise 2.2 Percent in May

A tightening supply of homes for sale coupled with stronger buyer demand has put upward pressure on home prices.

Bringing to an end a painfully long streak of declines, home prices rose for the second straight month in May with no cities posting new lows, according to Standard & Poor's Case-Shiller home price indexes.

Average home prices increased 2.2 percent in May over April numbers, according to the report released Tuesday, cementing the notion that the housing market is slowly healing. Prices in April rose 1.3 percent, after falling for seven consecutive months.

"May was a good month for housing with existing home sales almost 10 percent higher than year-ago levels, supply shortages in some markets, and a declining mix of foreclosure re-sales which particularly affect the Case-Shiller index," Stan Humphries, chief economist at Zillow, wrote in an E-mail.

[Read: Why Homeownership Is Stalling Even As Home Sales Improve.]

"Overall we remain cautiously optimistic that home values are at a bottom nationally even while our expectations for price appreciation in the next couple of years are muted," he added.

A tightening supply of homes for sale coupled with stronger buyer demand has put upward pressure on home prices, according to experts. Rock-bottom mortgage rates, slightly looser credit availability, and improving job growth have also nudged more house-hunters from window-shopping to the contract table.

Still, prices overall are down more than 30 percent from their peak in 2006 and experts caution that more monthly price declines could be on the way, primarily because spring and summer tend to be strong buying months.

According to the chairman of S&P's index committee David Blitzer, the current upward trend in prices must continue through summer into fall to really signal the housing market has found its footing.

"The housing market seems to be stabilizing," he said in a release Tuesday. "But we are definitely in a wait-and-see mode for the next few months."

Meg Handley is a business reporter for U.S. News & World Report. You can reach her at mhandley@usnews.com and follow her on Twitter.

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Airfares Coming in for a Landing: Ticket Prices to Ease in Late August

Travelers line up to get their luggage in the Southwest Airlines baggage claim at the San Jose International airport in San Jose, Calif.

After a scorching summer—both in terms of temperature and air travel costs—relief could be on the way for consumers, according to industry experts.

Analysts project airfares to drop 10 to 20 percent in late August, according to of airfare comparison site FareCompare.com While that's not entirely unexpected—prices tend to drop off a bit after the busy summer travel season—this year price breaks that usually happen in the fall are starting a bit earlier.

"Most of the savings are due to the end of peak travel season surcharges which all legacy carriers added for the summer travel season," Rick Seaney, co-founder and CEO of FareCompare.com, wrote in a recent report. "Once the fall season kicks in, surcharges will be dropped and low-cost carriers will match the larger airlines' lower ticket prices by cutting their base airfares."

[Check it Out: America's Meanest Airlines 2012.]

But airlines are also starting to come to grips with the hard realities of a sluggish economy and unstable global outlook. Visions of planes packed to the brim and high prices through summer are starting to fade and airlines are changing their tack to attract customers.

"Economic realities include the chaotic conditions of certain European economies, slower-than-expected growth in China, and the big bellwether, the price of oil," Seaney says. Oil dipped below the $80 per barrel mark this year but has since been creeping up, adding yet more uncertainty to the economic landscape.

All the uncertainty has made consumers a bit skittish when it comes to opening their pocketbooks and they're finally letting airlines know ticket prices have gone too high by staying home. As a result a flurry of airfare sales have been flooding consumers' inboxes including one-day specials (JetBlue) and extensions of fare sale periods (AirTran, Southwest).

But while fares might be coming down, don't expect any breaks when it comes to baggage and ticket cancellation and change fees. According to experts, those are only likely to get worse, with a few airlines now even charging for carry-on luggage.

"If anything they're increasing in terms of the price and number of fees," says Alicia Jao, vice president of travel media at personal finance website NerdWallet. She adds that Southwest and JetBlue tend to be the best airlines overall when it comes to fees these days.

Heightened consumer awareness has somewhat stemmed the surge in revenue airlines were raking in as a result of more and higher fees, but some legislators are still advocating for more regulation of airline fees to protect consumers from being nickel-and-dimed.

[READ: Top Deals To Earn Back Airline Miles.]

But with the airline industry just starting to find its feet after years of bankruptcies and restructurings, some aren't so sure slapping more rules on the industry is the right solution. Still, protecting consumers from exorbitant, arbitrary fees is likely something Congress views as a priority as well.

"It's tough because the airline industry has been plagued with declining profits and it's just starting to get back into the black," Jao says. "I wouldn't advocate for anything that really hurts the industry from having a viable business model in the long run, but there really does need to be consumer protection in the area."

For those scouting travel deals now, experts say it's best to pounce now rather than later. Travelers hoping to fly in late summer or fall should book now, as the cheapest sales seats are limited to only about 10 percent of a plane's capacity.

Meg Handley is a business reporter for U.S. News & World Report. You can reach her at mhandley@usnews.com and follow her on Twitter.

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