More people bought previously occupied homes in January. But sales surged on a rising number of foreclosures and all-cash deals, and not first-time home-buyers.

The rising number of distressed sales forced home prices down to their lowest level in nearly nine years, a troubling sign for the struggling housing sector.

The National Association of Realtors said Wednesday that sales of previously occupied homes rose slightly last month to a seasonally adjusted annual rate of 5.36 million. That's up 2.7 percent from 5.22 million in December.

Still, the pace is far below the 6 million homes per year that economists say represents a healthy market. And the number of first-time home-buyers shrunk to 29 percent of the market - the lowest percentage of the market in nearly two years. A more healthy level of first-time home-buyers is about 40 percent, according to the trade group.

Foreclosures represented 37 percent of sales in January. And all-cash transactions accounted for 32 percent of home sales - double the rate from two years ago when the trade group began tracking these deals. In places like Las Vegas and Miami, cash deals represent half of all sales.