The cost of a home in the UK increased by 0.9% during March, pushing average values back up above £150,000 to £150,946.
The surprise increase saw the annual rate of house price decline move from a record 17.6% in February to 15.7% in March.
Nationwide warned against reading too much into the monthly price rise, stating that it was "far too soon" to see it as evidence that the bottom of the market had been reached.
Fionnuala Earley, Nationwide's chief economist, said: "It is still too soon to say that this will be the beginning of sustained house price rises and a reflection of a wholesale return of confidence to the market."
Ms Earley also added that the current upturn in activity was likely to reflect the return of buyers who had delayed purchasing a home during the worst of the financial turbulence at the end of last year.
The house price figures come days after the Bank of England said the number of mortgages approved for house buying jumped by 19% during February.
The Royal Institution of Chartered Surveyors also said that interest from potential buyers rose for the fourth month in a row during February.