Home sales prices rise on tighter supply

Existing U.S. home sales fell in June compared to May, but tighter supplies pushed prices higher, the National Association of Realtors said Thursday. It was the second consecutive month in which the number of existing homes on the market shrank and prices rose. The trade group said sales of single-family homes, townhomes, condominiums and co-ops in June fell to a seasonally adjusted annual rate of 4.37 million from an upwardly revised 4.62 million in May. June's sales were 5.4 percent below May, but 4.5 percent higher than June 2011 when 4.18 million existing homes were sold. The total inventory of homes on the market fell 3.2 percent to 2.39 million, a 6.6-month supply at the current rate of sales. Tighter supplies, despite the slower rate of sales, pushed the median price of existing homes to $189,400 in the month, up 7.9 percent from June 2011. Prices climbed for the fourth consecutive month. That has not happened since February to May in 2006, the trade group said. "Despite the frictions related to obtaining mortgages, buyer interest remains solid. But inventory continues to shrink and that is limiting buying opportunities. This, in turn, is pushing up home prices in many markets," NAR chief economist Lawrence Yun said.