US home resales fell in March but the supply of properties on the market tightened and prices inched higher, giving mixed signals about the pace of recovery in the still-struggling housing sector.

The National Association of Realtors said today that existing home sales slipped 2.6 per cent to an annual rate of 4.48 million units last month.

However, February's sales pace was revised slightly higher to 4.60 million units from the previously reported 4.59 million units. Economists polled by Reuters had expected sales at a 4.62 million-unit sales pace last month.

The NAR said even with March's decline, the pace of sales in the first three months of the year marked the strongest first quarter since 2007.

An improving labour market has realtors upbeat about sales prospects for the rest of the year.

"This appears to be very sustainable," said NAR economist Lawrence Yun, referring to the pace of sales during the first quarter.

And in a sign that the nation's glut of unsold homes was easing, inventories fell to 2.37 million. Realtors in some markets have reported shortages of housing stock.

Nationwide, the median price for a home resale rose to $163,800 in March, up 2.5 per cent from a year earlier.

Distressed sales accounted for 29 per cent of resales, down from 34 per cent in February, the NAR said.