Inventory shortages continued to cramp existing-home sales’ style, according to the latest analysis by NAR.

Existing-home sales were down for the second month in a row in October, falling 3.2 percent from September, according to the National Association of Realtors (NAR).

Coming in at a seasonally adjusted annual rate of 5.12 million, existing-home sales in October were still 6.0 percent higher than a year ago; for 28 straight months, now, sales have improved upon their yearly measures.

The Housing Inventory Quagmire?

Lawrence Yun, NAR’s chief economist, fingered low housing inventory as the prime culprit for October’s lower sales volume.

“Low inventory is holding back sales while at the same time pushing up home prices in most of the country,” Yun said. “More new home construction is needed to help relieve the inventory pressure and moderate price gains.”

Indeed, housing inventory was down 1.8 percent from September to October, finishing the month at a 5.0-months supply. However, inventory is up nearly a percentage point from a year ago, and as Bill McBride showed on Calculated Risk, inventory has made considerable progress in recent months. So though inventory continues to play a role in housing, it’s likely that traditional seasonal factors also played a role in the slowdown.

Other important stats in NAR’s report included:

• One area that low housing inventory definitely impacted was median existing-home price, which was up 12.8 percent over last year; that’s the 11th straight month of double-digit yearly price increases!
• Distressed homes made up just 14 percent of sales, down from 25 percent last year.
• Median time on market was 54 days, up from 50 days in September but down from the 71 days of Oct. 2012.
• All-cash sales remained important, with 31 percent of sales being purchased via that method; that’s down from 33 percent last month, but up from 29 percent a year ago.
• Finally, though single-family home sales were down 4.1 percent, existing-condo sales rose 3.3 percent.

A Local Affair

According to NAR, existing-home sales in the South fell 1.9 percent in October, but were 7.3 percent above a year ago, while median price rose 12.9 percent to $154,700.

Jack Haymes, an agent with United Real Estate in Houston, said he’s seen a slowdown in the mid-to-high price ranges, with buyers taking a breather and planning more deliberately their next move; that sentiment, though, does not apply to all buyers.

“On the flip side, homebuilders have some inventory available for immediate move-in, meaning that very nice deals can be found within the new home market,” he said. “We are all anticipating the return of our strong buying and selling season.”