The housing market lost some steam in June as existing home prices fell by 5.4 percent from the prior month, although prices continued to rise.
According to the National Association of Realtors, existing home prices declined 5.4 percent to a seasonably adjusted annual rate of 4.37 million in June from an upwardly revised 4.62 million May.
"Despite the frictions related to obtaining mortgages, buyer interest remains solid. But inventory continues to shrink and that is limiting buying opportunities," Lawrence Yun, NAR chief economist, said in a statement. "This, in turn, is pushing up home prices in many markets. The price improvement also results from fewer distressed homes in the sales mix."
Existing home sales are up 4.5 percent from June 2011, which could be a good sign for the battered market.
According to the report, the media price for all housing types was $189,400 in June, up 7.9 percent from a year ago.
Foreclosures and short sales accounted for a quarter of June home sales, unchanged from the previous month. But, the figure was down from June 2011 when foreclosures and short sales accounted for 30 percent of home sales.
"The distressed portion of the market will further diminish because the number of seriously delinquent mortgages has been falling," Yun said.
The number of first-time buyers declined by 2 percent to 32 percent of purchases. While up from a year prior, NAR's economist says the figure in a healthy market should be around 40 percent.
"A healthy market share of first-time buyers would be about 40 percent, so these figures show that tight inventory in the lower price ranges, along with unnecessarily tight credit standards, are holding back entry level activity," said Yun.