U.S. home prices rose for the fourth-straight month in May, a sign of the gradual recovery in the housing market, according to a government home price index released Tuesday.

Home prices rose 0.8% on a seasonally adjusted basis in May from a month earlier, according to the Federal Housing Finance Agency‘s monthly home-price index. Compared with a year earlier, home prices were up 3.7%

April’s results were revised to a 0.7% monthly increase from March, compared with an originally reported 0.8% increase. The index remains 17% below its peak in April 2007 and is around the same level as in May 2004.

The results were better than forecast. Economists surveyed by Dow Jones Newswires had expected a 0.3% monthly increase in May.

The FHFA’s index is calculated by using the prices of houses purchased with mortgages backed by government-controlled mortgage companies Fannie Mae and Freddie Mac. A reading of 100 is equal to the price of homes in January 1991. May’s index value was 188.1.

The U.S. housing market has been showing signs of strengthening of late after a prolonged bust.  Home prices in the second quarter rose from the year-ago period for the first time since 2007, according to a closely watched index, the latest indication the housing market is starting to recover.

The report, which is scheduled to be released Tuesday by real-estate firm Zillow Inc., found that for the quarter ending in June, home values were up 0.2% from the same period in 2011.

While other indicators have shown home prices turning up since the spring, most examined short-term changes from one month to the next. However, home sales have decreased recently amid a thin inventory of lower-priced homes.

Sales of previously occupied homes fell in June to the lowest level in eight months, the National Association of Realtors said last week. It was the weakest report since October, but sales were still 4.5% above the same month a year earlier.

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