U.S. home prices ended the first quarter of the year at their lowest level since the market peaked in mid-2006, even if the rate of decline appears to have moderated as the months progressed, the latest S&P/Case-Shiller report showed.

Indeed, despite what the report said were "minimal" month-over-month changes for both the 10-City and 20-City composites in March, the leading measures of home values remained 2.8 percent and 2.6 percent lower year-on-year, respectively, according to the data.

Data for the national index—released only once a quarter—also betrayed the weakness of the market, with the national composite, which takes into account all nine census regions, down another 2 percent in the first quarter of 2012 compared with the previous quarter. That composite was 1.9 percent lower year-on-year.

Still, that decline appears to be moderating. In March, only five cities dropped to new post-crisis lows—Atlanta, Chicago, Las Vegas, New York and Portland. In the prior month, as many as nine cities had plumbed post-crisis nadirs.

All in all, home values across the U.S. are roughly 35 percent lower, on average, than they were back in mid-2006, the lowest they've been in nearly six years.

Finding a bottom that sticks for U.S. housing remains a critical pivot in an overall U.S. economic recovery, many analysts say. Housing, which was at the center of the credit meltdown that sent the entire economy into a recession, continues to struggle with large inventories, lack of consumer confidence, tight access to credit and still-high unemployment rates.

"While there has been improvement in some regions, housing prices have not turned," David Blitzer, chairman of the Index Committee at S&P Indices, said in the report.

"This is what we need for a sustained recovery: Monthly increases coupled with improving annual rates of change," he added. "Once we see this on a broader level we will be able to say the market has turned around."

Regional Differences Emerge

The housing market, despite its overall weakness, appears to be slowly reflecting regional differences in a way not seen since the entire market crashed some six years ago.  That could be important, as some believe that until the market behaves less as a single entity and more regionally, a sustainable recovery might remain elusive.

“The regions showed mixed results for March,” Blitzer said. “Twelve of the cities saw average home prices rise in March over February, seven saw prices fall, and one—Las Vegas—was flat.”

“After close to six consecutive months of price declines across most cities, this is relatively good news,” he added.

Year-on-year, only three cities dropped to new lows—Atlanta, Chicago and Detroit—with Atlanta still leading the pack in terms of annual losses. Home prices there are now 17.7 percent lower than they were a year ago and the lowest they’ve been in more than 12 years, the report showed.

Chicago is not far behind, with home values there hovering around their January 2000 levels. Cleveland, Detroit and Last Vegas are also among the weakest markets.

By contrast, home values in Phoenix are now 6.1 percent higher than they were just 12 months ago.