"'We're at a turning point in a number of markets,' said Paul Bishop, the association's research managing director. 'There are a lot of uncertainties in the economy, but it looks like we could be along the bottom.'
Nationwide, home sales fell 7.7 percent to 5.04 million, with declines in 32 states.
U.S. sales were helped by bargain hunters in Arizona, California and Nevada, where sales increased 76 percent compared with a year ago.
"Prices are drawing people into these areas and that's causing sales in some of the most distressed markets to increase," Bishop said.
The third-quarter median sale price for the Western states fell 21 percent to $266,300.
"It makes Iowa and other states look like they're performing relatively worse," Bishop said.