Sales of new homes in the U.S. fell last month, but still are edging higher than in the last months of 2011.

The government's Commerce Department said Tuesday that buyers in March bought new houses at an annual pace of 328,000, off more than 7 percent from a spurt in sales in February. The sales pace is slightly higher than in the last quarter of last year, but less than half the 700,000 figure that analysts consider the sign of a healthy market.

The U.S. housing market is perhaps the weakest part of the American economy, the world's largest. Millions of homeowners, many of them laid off from jobs in the recession, lost their houses to bank foreclosures when they were unable to make loan payments. As a result, there is a glut of homes for sale in the country and even record-low interest rates on loans have not boosted sales much.

A separate survey showed home prices in 20 U.S. cities in February dropped at a slower pace than in recent months. But the index indicated property values still declined 3.5 percent from a year earlier.