WASHINGTON (AP) - Home sales rose more than expected in March, reversing three months of declines, as government incentives drew in buyers and kicked off what is expected to be a strong spring selling season.

Sales of previously occupied homes rose 6.8 percent to a seasonally adjusted annual rate of 5.35 million last month, the highest level since December, the National Association of Realtors said yesterday. February's sales figures were revised downward slightly to 5.01 million.

"The spring selling season will be a success and probably the most active we're seen in years," said Stuart Hoffman, chief economist at PNC Financial Services Group.

Sales are likely to keep growing through the first half of the year as tax credits for first-time buyers and low mortgage rates fuel purchases. The average interest rate this week was 5.07 percent for a traditional 30-year fixed-rate mortgage, Freddie Mac said yesterday.

But doubts remain about whether the momentum will be sustained in the second half of the year when federal support is gone.

"This is a temporary surge that won't be sustained" said Paul Dales, US economist with Capital Economics. "It won't be very pretty."

Sales are now up 18 percent from their low in early 2009, but are still down 26 percent from their peak in fall 2005. March's results had been expected to rise about five percent to 5.28 million, according to economists surveyed by Thomson Reuters.

The results show the housing market is stabilizing after a devastating bust. But the true test will be whether the market can stand on its own after federal tax credits expire at the end of this month.

Sales rose in every region, surging more than seven percent in the Midwest and South, 6.6 percent in the West and six percent in the Northeast.

"It's a very broad-based recovery," said Lawrence Yun, the Realtors' chief economist.

The median sales price was $170,700, up almost four percent from $164,600 a month earlier and nearly unchanged from $170,000 in March 2009.

The inventory of unsold homes on the market was up 1.5 percent at 3.6 million. That is an eight month supply at the current sales pace.

Sales nationally had declined over the winter, eroding gains made last fall and summer. The downward direction troubled economists because the government has taken unprecedented steps to support the housing sector.

For several months, home shoppers did not feel rushed after lawmakers extended the deadline to qualify for tax incentives. The government is offering a $8,000 credit for first-time buyers and $6,500 for current homeowners willing to buy and move into another property. But now time is running out. Buyers must sign contract offers by April 30 to qualify, and real estate agents say that is spurring sales.

"Many people who otherwise wouldn't be on the market for a home want to take advantage of these tax credits," said Kathi McLeod, sales manager for Windermere Real Estate in Boise, Idaho. "You have buyers who have been looking and looking at properties and realising that it's almost too late, so they're really scrambling and jumping into deals."

The Realtors group is not pushing for an another extension of the tax credit. Yun said he believes there will be enough demand in the second half of the year without a government subsidy.