U.S. home prices rose again in March, tagging on double-digit year-on-year gains in what amounts to the market's best price improvement since 2006, according to the latest S'P/Case-Shiller Home Price report.

For the third-straight month, all 20 cities surveyed saw home values tick up year-on-year, with average home prices up 10.3 percent and 10.9 percent, respectively, for the 10-City and 20-City Composites in the past year ended March, the report said. The national composite—comprising all nine U.S. census divisions—rose 10.2 percent in the past year.

The U.S. stock market was welcoming the data with an opening- bell rally that had equities up roughly 1 percent for both the S'P 500 and the Dow Jones industrial average.

On the ETF front, funds that tap into housing continued to see stellar performance. The iShares Dow Jones U.S. Home Construction ETF (ITB) rallied 1.5 percent in early trade Tuesday following the release of the report.

ITB, which has now risen 22 percent year-to-date, is up more than 66 percent in the past year. ITB was also the top-performing fund in 2012.

The SPDR S'P Homebuilders ETF (XHB)—a fund that tracks a modified equal-weighted benchmark comprising homebuilder names in addition to home furnishing retail, home improvement retail and household appliances—has rallied 53 percent in the past year.

Calling housing one of the "brighter spots in the economy" last month, David Blitzer, head of the Index Committee at S'P Dow Jones, said in this latest report that various data supports a recovery in housing, even if that recovery isn't fully developed.

"Home prices continued to climb," Blitzer said. "Other housing data reported in recent weeks confirm these strong trends:housing starts and permits, sales of new home and existing homes continue to trend higher."

"At the same time, the larger than usual share of multi-family housing, a large number of homes still in some stage of foreclosure and buying-to-rent by investors suggest that the housing recovery is not complete," he said in the report.

An average home in the U.S. today costs roughly what it did mid-2003, remaining between 28 to 29 percent off its peak level hit sometime in 2006.

While all 20 cities saw year-on-year home price improvement, two of the 20 cities surveyed saw home prices slip on a month-to-month basis in March; and three had steady prices on the month, the report showed.

As many as 12 cities surveyed—Atlanta, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, Phoenix, Portland, San Diego, San Francisco, Seattle and Tampa—showed annual home value gains in the double digits.