While the floodgates of buyer demand are finally starting to open, it's would-be sellers that are now clamming up.
Contrary to when falling prices kept buyers on the sidelines wondering when the market would hit bottom, experts say rising prices have now encouraged many Americans who are contemplating selling their homes to wait it out—or rent it out—to capture the best return possible in a dinged-up real estate market. Underwater mortgages have forced another set of would-be sellers to the sidelines.
Those factors have created a dearth of affordable homes for sale, once again limiting sales of previously-owned homes in June, according to the National Association of Realtors, pushing figures to an eight-month low and underscoring the fact that the real estate recovery will take time to flourish.
Existing-home sales fell more than 5 percent from May to June, but remain 4.5 percent higher than sales in June 2011, NAR reported Thursday.
The number of homes for sale fell more than 3 percent in June to about 2.4 million properties, down almost 25 percent from the stock available a year ago. Meanwhile, the median existing-home price was just above $189,000 in June, up almost 8 percent from a year ago, the strongest gain since February 2006, when median prices rose almost 9 percent.
First-time home buyers remained a major force, making up about 32 percent of all buyers in June. Economists would like to see that figure closer to 40 percent, especially with such favorable lending terms, but blame tight inventory conditions in many markets for stunting sales.
"Buyer interest remains solid, but inventory continues to shrink and that is limiting buying opportunities," Yun said in a release. "This, in turn, is pushing up home prices in many markets. The price improvement also results from fewer distressed homes in the sales mix."
Meg Handley is a business reporter for U.S. News & World Report. You can reach her at firstname.lastname@example.org and follow her on Twitter.