Home prices tick up slightly in majority of big cities

"We just need to see it happen in more of the cities and for many months in a row," he said. 

In March, only seven cities experienced falling prices, compared with 16 in February, while Las Vegas was flat. 

Heading into a seasonal buying period, Blizter said it is important to look at monthly and annual rates of change in home prices to understand the broader trend going forward.

The national index dropped by 2 percent in the first quarter, about the same amount as last year, and is down 35.1 percent from its peak in the second quarter 2006 peak, about the same as the 10- and 20-city indexes. 

The 10- and 20-city indexes posted annual drops of 2.8 percent and 2.6 percent in March, which reflect slower declines, as prices dropped only slightly or were unchanged from February to March, a signal of the broader housing market recovery. 

Average home prices in the 10-city index fell by 0.1 percent in March while and the 20-city measurement remained basically unchanged after falling 0.8 percent in February.

Five cities — Atlanta, Chicago, Las Vegas, New York and Portland — saw average home prices hit new lows, an improvement over the nine cities in February. 

The S&P index covers about half of all homes and creates a three-month average, which may mean that it could take longer for the index to show an improvement. 

The biggest month-over-month increases were in Phoenix, Seattle and Dallas. Phoenix posted the best overall annual increase of any cities, up 6.1 percent. 

Only three cities — Detroit, Chicago and Atlanta — saw annual rates worsen in March. 

The other 17 cities showed improvement, though most are still showing a negative trend. 

Seven cities — Charlotte, Dallas, Denver, Detroit, Miami, Minneapolis and Phoenix — are each showing annual price increases. 

"This is what we need for a sustained recovery: monthly increases coupled with improving annual rates of change," Blitzer said. 

"Once we see this on a broader level we will be able to say the market has turned around."

But March figures were better in Atlanta, which has seen prices fall 17.7 percent in the past year; prices fell only 0.9 percent from a 2.5 percent decline in February.

Home prices were below their January 2000 levels in Atlanta, Cleveland, Detroit and Las Vegas. 

The housing market is set up for a recovery with record-low mortgage rates, affordable prices, plenty of inventory and an improving job market Yet, potential buyers still face difficulty getting loans and dealing with inaccurate appraisals that lead to canceled contracts. 

Sales of new and existing homes are still about half of what economists consider a healthy market, but they have been gradually improving, climbing near two-year highs in April. 

The job market has been improving but not at a pace fast enough to bring the unemployment rate below 8 percent. Job creation slowed this spring, but economists expect better returns this summer. 

The government will issue its jobs report for May on Friday.