Sales of previously occupied homes rose in March to a seasonally adjusted annual rate of 5.1 million, the National Association of Realtors said Wednesday. That's a 3.7 percent increase from the February pace, but far below the 6 million homes a year that economists say represents a healthy market.

Foreclosures or short sales - when the lender agrees to accept less than what is owed on the mortgage - rose to make up 40 percent of all purchases.

These distressed homes continued to make up a large share of San Bernardino County's existing home sales, accounting for 71 percent of single-family homes sold in March, the California Association of Realtors said on Wednesday. But that was a drop from February, when distressed properties made up 76 percent of sales, and the 75 percent share from a year ago.

In the state as a whole, distressed homes, or real-estate owned homes and short sales, made up 51 percent of home sales.

The association reported last week that sales of single-family, previously occupied homes in California rose to an annualized rate of 514,090 units in March, up 3.1 percent from the month before and a slight increase from a year ago. San Bernardino County home sales also increased on a monthly basis, rising 25 percent from February, but recorded a 0.9 percent dip from a year ago.

Deals paid for entirely in cash accounted for 35 percent of all U.S. resold homes. The national Realtors group says that's the biggest percentage since it has been tracking all-cash sales.