Text .By CONSTANCE MITCHELL FORD

Home prices continued to decline across the nation as sales of heavily discounted foreclosed properties weighed down the market.

Median prices of existing homes fell in 123 of 153 metropolitan areas during the third quarter compared with a year earlier, according to the National Association of Realtors. The national median price was $177,900, down 11.2% from the third quarter of 2008.

Distressed sales -- mainly foreclosures and short sales -- accounted for 30% of transactions in the third quarter, according to the NAR, which pulled down average prices because foreclosed homes sell at steep discounts. Short sales are transactions in which at-risk borrowers sell their homes for less than the loan amount, with the lender's approval.

Metropolitan areas in Florida and Nevada continued to see the most severe price declines. In the Cape Coral-Fort Myers area, median prices were down 40% during the third quarter from a year earlier, to $98,000. In Las Vegas, median prices were down 34.5% in the third quarter to $138,500. In 2006, median prices were $268,200 in the Cape Coral-Fort Myers area and $317,400 in the Las Vegas area.

.Still, home sales rose 11.4% nationwide to a seasonally adjusted annual rate of 5.3 million units during the third quarter, up from 4.76 million units in the second quarter.

Lawrence Yun, the NAR's chief economist, attributed rising sales to the federal tax credit of up to $8,000 for first-time home buyers. "We can't underestimate just how powerful a catalyst the first-time home buyer tax credit has been for the housing sector," he said in statement.

President Barack Obama signed a bill last week extending and expanding the federal tax credit to include buyers with higher incomes and those who are existing homeowners.

Mr. Yun said that while foreclosures will continue to depress the market, "rising sales from the expanded tax credit should stabilize home prices by next spring."