Home prices continued to surge in May, rising 12.2 percent from a year ago for their strongest annual gains in more than seven years, according to the Standard & Poor’s/Case-Shiller Index.

From April, prices were up 2.4 percent for the 20-city composite, Case-Shiller said.

When adjusted for seasonal factors, however, the month-to-month gain was 1 percent. That’s strong but smaller than in previous months, which should reduce worries about a housing market bubble forming, says Jed Kolko, a Trulia economist.

Home prices in Dallas and Denver surpassed their pre-financial crisis peaks set in 2007 and 2008, marking the first time any city in the index has set a new all-time high.

The arrival of new peak prices underscores how far the housing recovery has come in some markets that were not hit as hard by the housing bust as others.