Clear Capital home data market report through March 2014 found that national home prices remained mostly flat over the winter, while distressed saturation over the month remained stable at 21.8%.

Short-term declines in the Midwest and nearly non-existent growth over the quarter were the most concerning elements of the report. The last time the Midwest fell into negative territory was June 2012. Five metro markets showed quarterly declines.

“Our data through the end of March reveals prices remained steady through the final weeks of winter, a sigh of relief to all market participants,” said Alex Villacorta, vice president of research and analytics at Clear Capital. “Yet, national quarterly gains of just 0.7% mean there’s certainly still risk for short-term price declines in some markets. But over the year, we see Phase Three of the recovery unfolding, which we define as moderation across all price tiers.

The report also found that low-price home sales – those under $95,000 – fueled the recovery over the last two years. This deeply discounted sector attracted enough buyers to drive prices up 31.8% from the bottom of the market in 2011.

Low tier home price gains in the last quarter have slowed though, to just 1.2%—a big difference from 3.7% a year ago. Stabilization, with rates of growth not seen since November 2011, could motivate first-time and move-up home buyers to re-engage, Clear Capital reports.

While the recovery took hold, home price gains outpaced growth in the owners’ equivalent of rent in most of 2012 and 2013. As prices continue to moderate in 2014 toward more historical rates of growth, investors will need to dive down into granular data and analysis to find markets where attractive home prices and rental rates still offer competitive investments.

“Analyzing rental rates and home price trends at the national level suggest the current investor pool may start to wane as the rate of home price growth outpaces the rate of owners’ equivalent of rent. Don’t expect investors to exit all at once. Good deals at the micro market level will persist well into 2014,” Villacorta said.

“The key to overall market progress and stability in 2014 will lie in the transition from investor to traditional home buyer demand. While each segment will continue to be important, healthy markets have shown higher rates of traditional home buyer demand and less investor-driven demand,” Villacorta said. Should prices remain stable, home buyer confidence will build, supporting a balanced transition.”