Out of 163 metro areas across the country, 31 percent experienced double-digit annual home price gains in the second quarter, according to a report from the ""National Association of Realtors"":http://www.realtor.org/ (NAR).
[IMAGE]During the second quarter last year, only 14 percent of markets showed double-digit yearly increases.
Overall, 87 percent of the metro areas tracked saw median prices for existing-homes rise compared to last year, while 12 percent experienced declines, NAR data showed.
At the same time, the national median price rose 12.2 percent to $203,500 compared to last year. The annual increase represents the strongest gain in over seven years.
Lawrence Yun, NAR's chief economists, says tight inventory is driving up prices.
""Areas with tighter supplies generally are seeing the strongest price growth, including markets such as
[COLUMN_BREAK]Sacramento, Atlanta, Las Vegas, Naples, San Francisco and Los Angeles,"" Yun added.
On the other hand, Yun explained price increases are more modest in judicial states.
""In areas where foreclosed inventory still looms because distressed properties are mired in a slow process, lender and market uncertainty are holding back price growth. This includes areas such as New York City; Hartford; Conn.; and some markets in New Jersey,"" he said.
Yun also noted ""[h]igher interest rates are now causing sales to level out.""
NAR data also found distressed homes (foreclosures and short sales) in the second quarter represented 17 percent of sales in the second quarter, down from 26 percent during the same quarter a year ago.
Meanwhile, available supply for existing homes decreased to 5.1 months in the second quarter compared to 6.4 months a year ago, and the total number of homes on the market stood at 2.19 million in the second quarter, down 7.6 percent from a year ago.
""Supplies in the low 5-month range can be expected for the foreseeable future,"" Yun said. ""Steady increases in new home construction will help to relieve shortage conditions going into 2014, which would moderate price growth.""
Despite low inventory, existing-home sales increased in the second quarter, rising to a seasonally adjusted annual rate of 5.06 million, up from 4.94 million in the prior quarter and a significant leap from 4.51 million a year ago.