Spring U.S. housing market hints at awaited recovery

California, the nation's largest housing market, is being watched as a gauge for the climate of the country. In San Francisco, home prices rose 0.6 percent in April compared to the 2.2 percent decline the prior month. The state is currently coping with a budget crisis that is hurting its economy.

California, the Central Valley aside, will be one of the first housing markets to bottom out, while Florida will be one of the last, according to Moody's Economy.com's Zandi.

"The state is awash in housing inventories and the job market is very dependent on tourism and travel, retirees and real estate," he said.