Home sales drop in May - WKOW 27: Madison, WI Breaking News, Weather and Sports

MADISON (WKOW) -- Nationwide home sales fell back in May, according to the monthly report from the National Association of Realtors (NAR), which was quick to point out the 1.5 percent decline in existing home sales last month was mostly due to a lack of homes for sale.

"The slight pullback in monthly home sales is more likely due to supply constraints rather than softening demand," said Lawrence Yun, NAR's chief economist. "The normal seasonal upturn in inventory did not occur this spring."

Yun also points out that even though sales declined from April to May, they were up 9.6 percent from May 2011.

Yun says there are broad-based shortages of inventory in the lower price ranges in much of the country. Many believe it is due, in part, to the inability of underwater homeowners to sell, as well as the belief by others that right now might not be a good time to sell.

With supplies tightening, you would think that prices would being to rise and Yun says that's exactly what's happening. The median existing single-family U.S. home price was $182,900 in May, up 7.7 percent from a year ago.