NEW YORK (CNN/Money) – Home prices aren't rising as quickly as they once did but sales are still sizzling and dwellings continue to fetch fat offers.

Home sales reached a record 6.68 million in the first three months of the year. Meanwhile median sales prices for existing family homes hit $161,500 in the first three months of the year, up 7 percent from the year before, according to the National Association of Realtors. The gain is impressive but still short of the 8.4 percent price hike homes averaged in the fourth quarter of last year.

Nevertheless, tight supplies of available housing and low mortgage rates are keeping sales humming.

Fastest growing markets From first quarter 2002 to first quarter 2003. Market  Gain  Philadelphia, PA   25.7%  Providence, RI   25.7%  Melbourne-Titusville-Palm Bay, FL   25.4%  Sacramento, CA   25.3%  Trenton, NJ  24.0%   Source:  National Association of Realtors

Even experienced real estate pros are amazed at how competitive the buying remains.

Scott Gibson, president of the Los Angeles area realties for Coldwell Banker says that the company hosted two different open houses in the past two weeks that drew more than 400 people to each property. One of the homes was selling for $500,000, the other for $1.3 million.

On average, though, Coldwell Banker has been averaging 26 potential sellers for every open house it hosts in the Southern California community, Gibson said.

Priciest housing markets As of first quarter 2003. Market  Median home price  San Francisco, CA   $509,000  Anaheim-Santa Ana, CA   $448,400  Boston, MA   $413,500  San Diego, CA   $389,100  Bergen-Passaic, NJ   $358,300   Source:  National Association of Realtors

"It's frustrating for buyers. It's tense out there and there's a certain amount of discouragement. But the interest rates continue to be a major motivator for folks," said Gibson. "It's cheaper to buy than rent. "

Indeed, nationwide, buyers typically paid 5.84 percent for 30-year, fixed-rate mortgages from January through March. That's the lowest quarterly record in four decades.

By the end of the quarter, median housing prices ranged from a heady $509,000 in the San Francisco Bay area to a more modest $80,700 in the Waterloo-Cedar Falls area of Iowa. That meant sellers in plenty of markets pocketed rich gains. Thirty-one out of 117 metropolitan areas from Philadelphia to Richmond, Va. saw double-digit price increases from the first quarter of 2002.

See housing prices and growth for more than 100 metro areas

That's down slightly from the record-breaking 39 metro areas that posted double-digit jumps in the fourth quarter of 2002, when the national gain for existing home sales.

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Meanwhile, sales of condominiums and co-ops broke first-quarter records, with the national median price for a condo during the first three months of the year landing at $150,800, an annual gain of 12.5 percent.

First-time buyers snatched up lower-priced condos and co-ops, while older buyers competed for more pricey luxury units.

"Younger households, including children of the Baby Boom generation, are taking advantage of low interest rates and getting into the housing market, while many of their parents' generation are seeking simpler lives" and moving out of single-family homes into co-ops and condos, NAR Chief Economist David Lereah said in a statement.

Tight supplies of the units helped boost condo and co-op prices, too.

That was especially true in the West where the median co-op and condo price jumped 15.5 percent over the last year to $184,200. In the Northeast, condos and co-ops fetched a median $155,800, up 15.2 percent. Midwest buyers spent nearly as much -- $154,200 was the median there – for their dwellings (up 7 percent), while in the South, condos and co-op median sales prices rose 14.3 percent to $123,400.

That's not to say some buyers aren't finding relative deals.

Eight market areas saw existing housing prices drop during the past year. The biggest loser was Chattanooga, Tenn., where first-quarter home prices shed 4.4 percent in the past year. Other areas that experienced price declines include: South Bend-Mishawaka, Ind.; Greensboro-Winston Salem-High Point, N.C.; Tallahassee, Fla.; Montgomery, Ala.; Waterloo-Cedar Falls, Ind.; and the Austin-San Marcos, Texas, area.