First-time home buyers accounted for half of all housing purchases during the first quarter, the National Association of Realtors reported Tuesday.

An $8000 federal tax credit, historically low interest rates and the discounted prices of short sales and bank-owned properties all combined to turn renters into homeowners, economists said.  Nationally home prices were down almost 14 percent.

Lawrence Yun, NAR chief economist, said first-time homebuyers are "critical for a housing recovery."

He predicted that they "are likely just the first wave of new buyers coming into the market." "Housing affordability conditions are at record high levels and we expect a measurable increase in home sales during the second half of the year, which would help stabilize prices in most areas," he said.

Nationally, both prices and the number of home sales dropped in the first quarter, compared with the same period last year.

The median price of existing single-family homes dipped to $169,000, a 13.8 percent drop from the first quarter of 2008. The median is where half sold for more and half sold for less. The first quarter also saw 4.59 million home sales, a 6.8 percent drop in total sales compared with 4.93 million homes sold during the same period last year. The first quarter was also down 3.2 percent from 4.7 million sold in the fourth quarter of 2008.

Despite the national figures, NAR President Charles McMillan tried to calm jitters of longtime homeowners. “Traditional homes in good condition have held their value much better, so owners shouldn’t be overly concerned about median prices,” McMillan said. “Most sellers can expect a good return if they’ve been in their home for a normal period of homeownership and haven’t excessively tapped their equity.”