The 0.1% rise in average house values to £160,519 in May follows a decline of 1.4% in April.
It means house prices in the three months from March to May were 1.2% lower than in the preceding three months.
Martin Ellis, housing economist at Halifax, says the underlying trend on house prices is one of modest decline.
He says: “Low earnings growth, higher taxes and relatively high inflation are all putting pressure on household finances. Confidence is also weak as a result of uncertainty about the economic and employment outlook.
“These factors are probably constraining housing demand and applying some downward pressure on prices.”
Ellis adds that he expects to see moderate improvements in economic growth during the remainder of 2011, which is likely to support housing demand when combined with continued low interest rates.
He says: “This should prevent a further marked fall in prices and help to stabilise property values later in the year.”