But the society warned that it is still too early to be optimistic about a recovery as during the last major property downturn in the 1990s there were many months when real estate prices rose only to fall again.
However the figures show that average residential property prices rose 1.2% during May, the second rise since March when prices move upwards for the first time since October 2007.
This has slowed the annual rate of decline from 15% to a nine month low of 11% and Nationwide attributed the good news to the lack of new properties coming onto the market.
But is chief economist Martin Gahbauer urged caution and said that rising unemployment and restricted lending meant prices were likely to resume their downward path.
'Although the short-term trend in property prices has clearly improved from where it was at the beginning of the year, it is still too early to say that the market is turning definitively,' he said.
'In the current downturn, the combination of rapidly rising unemployment and tight access to credit implies that the last of the price declines has probably not been seen yet,' he added.
Within the industry there is concern that mortgage lenders are still reluctant to lend to those without a significant equity cushion and figures from the Bank of England showed the UK's top six banking groups scaled back lending to home owners last month.
The lack of supply may also be due to a change in legislation in April that requires property sellers to obtain more information and complete a home information pack before they can put their property on the market.
