NEW YORK (CNN/Money) - Sales of existing homes fell in March, a group of U.S. Realtors said Friday, as one of the strongest sectors of the otherwise sluggish U.S. economy felt the lingering effects of harsh winter weather.

A report from the National Association of Realtors (NAR) showed homes sold at an annual rate of 5.53 million in the month, down 5.6 percent from February's level. Analysts surveyed by Reuters had expected sales to rise to a 5.77 million rate in the month.

The NAR said the dip was a natural pull-back from an unsustainable record pace, set in January, of more than 6 million units.

"There's a huge momentum in sales activity continuing, and we're now at a much more sustainable level for home sales going forward," NAR chief economist David Lereah said.

The median price for an existing home was $163,100, compared with $161,600 in February.

Separately, the Commerce Department said the pace of new home sales rose 7.3 percent to a seasonally adjusted annual rate of 1.01 million units from a revised rate of 943,000 units in February. Economists, on average, expected a pace of 898,000 units, according to Reuters

New home sales were driven by a dramatic surge in sales in the South and Northeast, possibly representing a release of pent-up demand for homes that was kept in check by February's harsh winter weather.

New homes in the South sold at a 503,000-unit annual pace, the fastest on record. In the Northeast, new homes sold at a 104,000-unit annual rate, the fastest pace since 107,000 in January 1997.

The weakness in existing home sales might have been related to the weather, as well, said Ian Shepherdson, chief U.S. economist at High Frequency Economics Ltd., since many March closings depended on deals made in February, when the weather was bad.

"There is no reason yet to expect a real weakening in sales," Shepherdson said.

The housing market has been one of the few bright spots in an economy that fell into recession in 2001 and has struggled to maintain growth ever since.

Spotty growth and a lingering bear market in stocks have helped keep interest rates low, which has fueled a boom in home sales and mortgage refinancing. Cash-out refinancings and lower mortgage payments have helped support consumer spending, which makes up more than two-thirds of the total economy, and higher home prices have made consumers feel wealthier.

Some economists have worried that the housing market might even be in a dangerous "bubble," similar to the stock-market bubble of the late 1990s.

But most economists say prices are in no danger of falling off the table. Sales and mortgage activity should slow down as interest rates rise, they say, but home inventories are lean, helping support prices, and a stronger economy should support demand for homes.

"We believe this will be the second-best year on record for housing," Lereah of the NAR said.