Realtors say price increases not deterring buyers

Buyer demand is up, but there aren’t enough homes available to buy, according to the National Association of Realtors which blamed a recent drop in home sales on a diminishing inventory.

“Recent price increases are not deterring buyer interest,” said Lawrence Yun, NAR’s chief economist. “Rather, inventory shortages are limiting sales, notably in parts of the West.”

Homeowners are not putting their homes on the market at a high enough rate to offset the drop in distressed volumes, CNBC reported. Distressed sales have made up more than one-third of home sales in the past two years, but more recently has only made up about 24 percent of total home sales.

Besides the drop in distressed homes for sale, many homeowners are still continuing to wait out the market to recover more equity in their homes before they try to sell.

Yun said that builders need to increase construction in order for home sales to recover more and to meet the demand for houses. Housing starts have risen 43 percent compared to a year ago, but levels still are only about half of what is considered normal for the sector.