The National Association of Realtors today urged lenders to release any bank-owned properties that have been held back in markets with inventory shortages, blaming the tight supply of homes as a factor in a 1.4 percent decline in pending home sales from May to June.

Although NAR’s Pending Home Sales Index slipped to 99.3 in June, that’s up 9.5 percent from the 90.7 reading recorded a year ago, marking 14 consecutive months of year-over-year gains. An index of 100 is equal to the average level of contract activity during 2001, a "historically healthy" year for housing sales.

NAR Chief Economist Lawrence Yun said buyer interest "remains strong, but fewer home listings mean fewer contract signing opportunities. We’ve been seeing a steady decline in the level of housing inventory, which is most pronounced in the lower price ranges popular with first-time buyers and investors."

Yun thinks housing starts will likely need to double over the next two years to satisfy the pent-up demand for both rentals and ownership.

Another factor that’s keeping a lid on inventory is that many homeowners who would like to sell are unable to because they are "underwater" on their mortgage — they owe more than their homes are worth.

As home prices rise, that’s expected to release pent-up seller demand. During the first three months of the year, data aggregator CoreLogic estimates that rising home prices helped more than 700,000 homeowners regain equity in their homes, but 11.4 million borrowers still owed more than their homes were worth.

In its latest economic outlook, NAR projects that existing-home sales will grow 8.6 percent this year to 4.62 million, and by another 7.5 percent next year, to 4.97 million.

New-homes sales are on track for 30.6 percent growth this year, to 393,000, and NAR projects 59.3 percent growth in 2013, to 626,000.

NAR predicts that the combination of increased demand and constrained inventory will boost the median price of an existing home by 4.3 percent this year, to $173,200, and another 4.9 percent in 2013, to $181,600.

The trade group’s forecast anticipates 3.8 percent growth in the median price of new homes this year, to $234,300, and a 4.3 percent gain next year, to $244,400.

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