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Home prices not affecting existing home sales

Home prices have been rising over the last few months.

Higher prices have not hurt existing home sales, according to reports from several housing organizations. The price index from Black Knight Financial Services found that home prices for all types of properties increased 1 percent in March from February and 7 percent from March 2013.

The Federal Housing Finance Agency, in a separate report, found that prices were higher from the first quarter of 2013 by 1.3 percent.

Existing home sales - which compose 90 percent of all home sales on the market - were up 1.3 percent in April from March to 4.65 million units, according to the National Association of Realtors. That is the first level of growth this year, but represents a 6.8 percent decline from April 2013. Lawrence Yun, chief economist for the National Association of Realtors, said home sales were a bit below what they were expecting.

"Some growth was inevitable after subpar housing activity in the first quarter, but improved inventory is expanding choices and sales should generally trend upward from this point," Yun said.

Yun went on to say that because of slower housing activity toward the beginning of 2014, annual home sales may be down for the year.

Jay McCanless, an analyst at Sterne Agee, said the average time to sell homes improved as well.

"April's average months-to-sell reading was 4.0 in the top 25 markets, lower than both 4.1 in March and April's national average of 5.9," McCanless said. "Gross inventory in our top 25 markets increased 9.8 percent year-over-year, versus a 6.5 percent year-over-year increase in national inventory levels."

McCanless went on to say that areas with less than six months' worth of inventory are generally seller's markets, which then leads to homebuilders and other sellers raising prices.