Sales of existing homes declined 3% in March to a seasonally adjusted annual rate of 4.57 million units, 7.1% below March a year ago, the National Association of Realtors reported Thursday. The sales rate missed Wall Street estimates, which were for an annual pace of 4.65 million homes.

The NAR also downwardly adjusted its estimate for February to 4.71 million homes from 4.72 million. The NAR last month reported an unexpected 5.1% jump in existing home sales for February.

The median price, however, rose from February to March by 4.2% to $175,200, a greater jump than the 1.8% historic average for the period. Still, the median price was down 12.4% from March, 2008.

The NAR said distressed properties accounted for slightly more than half of all transactions and that a member survey indicated that 53% of sales were to first-time home buyers.

"The share of lower priced home sales has trended up, indicating a return of many first-time buyers, which we also see in a parallel member survey,² said Lawrence Yun, the NAR's chief economist. "Sales in the upper price ranges remain stalled because of higher interest rates on jumbo loans."

Total housing inventory was down 1.6% to 3.74 million homes by the end of March, a 9.8-month supply, up from 9.7 months in February. Single-family home sales were down 2.8% to an adjusted annual rate of 4.10 million, 5.7% below March 2008. The median existing single-family home price was $174,900 in March, which is 11.5% below a year earlier.

Existing condominium and co-op sales fell 4.1% to a rate of 470,000 units in March, 17.8% below the pace a year ago. The median existing condo price was $177,600 in March, down 18.7% from March 2008.

Regionally, existing-home sales in the Northeast fell 8.0% to an annual pace of 690,000 in March, 22.5% percent below a year ago, with median prices down 18.4% year-over-year to $231,700. The Midwest was flat with February at a pace of 1.04 million, 11.1% below March 2008, with the median price down 6.1% to $141,300. The South fell 1.7% to 1.71 million, 10.9% below a year ago; the median price was down 12.2% to $146,900. The West was off 4.2% to1.13 million, an increase of 18.9% from a year earlier, but the median price was down 11.1% to $252,400.

"Buyer traffic has been rising, and real estate offices are getting phone inquires about the tax credit," Yun said. "By early summer we should be seeing a positive impact on home sales from record-low mortgage interest rates in addition to the stimulus provisions."