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The National Association of Realtors (NAR) reports that the seasonally adjusted annual rate of existing home sales in June fell 1.2% to 5.08 million from a downwardly revised total of 5.14 million in May. Sales are up 15.2% year-over-year for the month. The consensus estimate called for sales to reach 5.27 million.

Housing inventory rose again in June, up 1.9% to 2.19 million homes, which is equal to a supply of 5.2 months, compared with a five-month supply in May. Listed inventory is down 7.6% year-over-year, when there was a 6.4 month supply available.

According to the NAR, the national median existing home price in June was $214,200, up from $208,000 in May and up 13.5% compared with June 2012. That marks the 16th consecutive month to see a price gain and the seventh consecutive month of double-digit increases. The last time housing prices went on such a string of price increases was the period between February 2005 and May 2006.

NAR’s chief economist said:

Affordability conditions remain favorable in most of the country, and we’re still dealing with a large pent-up demand. However, higher mortgage interest rates will bite into high-cost regions of California, Hawaii and the New York City metro area market.

Foreclosed and short sales accounted for 15% of June sales, down from 18% of May sales and below the 26% share in June 2012. Foreclosures sold at an average 16% discount to the June median price, while short sales sold at a discount of 13%. Both discounts increased slightly month-over-month.

Existing, non-distressed homes were on the market for an average of 35 days, while foreclosed homes were on the market for an average of 41 days and short sales took a median of 68 days to sell. These counts are all lower than they were a month ago.

There were fewer distressed sales in June and the inventory shortage is closing. That may be due to higher mortgage rates keeping buyers out of the market. It is important to remember that existing home sales do not add much to U.S. gross domestic product (GDP). As Bill McBride notes, only brokers fees on existing homes are counted in GDP calculations. To get an accurate picture of how home buying is affecting the economic recovery, new home sales are the indicator to watch.