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 Midwest fell 1.6 percent in October, but were 8.0 percent above a year ago, while median price rose 9.3 percent to $154,700.

Michael Parent, the vice president of Burnet Title Chicago and the current president of the Mainstreet Organization of Realtors (MORe), said there is currently much to like in Chicago’s housing market. For instance, not only is inventory up 4.3 percent year-to-date, but the number of homes under contract in MORe’s suburban markets is up 28.2 percent year-to-date.

“We’re seeing good numbers across the board,” Parent said. “You’re seeing the roller coaster starting to get up on that track.”

Though uncertainty remains among consumers (with job security and financing being the two biggest sources of anxiety), Parent said the market is definitely heading in the right direction, with stable, walkable communities leading the way.