Existing homes were selling at the second slowest rate of the year in June, according to the National Association of Realtors. The pace dropped significantly from the previous month, but still showed some year-over-year growth.

The seasonally adjusted annual rate for sales of existing single-family homes, townhouses, condominiums, and co-ops stood at 5.52 million during the month. This was down 1.8 percent from a pace of 5.62 million in May, but still up 0.7 percent from June 2016. The pace was the slowest since February's rate of 5.47 million sales.

"Closings were down in most of the country last month because interested buyers are being tripped up by supply that remains stuck at a meager level and price growth that's straining their budget," said Lawrence Yun, chief economist of the National Association of Realtors. "The demand for buying a home is as strong as it has been since before the Great Recession. Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines."

Shrinking inventory has presented a challenge for buyers in recent years, since it increases competition for available properties and helps drive up prices. There were 1.96 million existing homes for sale at the end of June, down 0.5 percent from May and 7.1 percent from June 2016. This marked the 25th consecutive month where the inventory of existing homes for sale has experienced a year-over-year decline.

The homes that were available for sale were often purchased within a month of listing. Properties sold in June spent a median of only 28 days on the market, one day slower than the previous month but one week faster than the previous year. Fifty-four percent of all homes sold in June found a buyer in less than a month.

Home prices rose from the previous year for the 64th month in a row and exceeded the previous month's record high. The median sales price for an existing home in June was $263,800, a 6.5 percent increase from June 2016.

Single-family homes were the most popular choice, with the annual sales rate of 4.88 million marking a 2 percent drop from the previous month. However, the pace edged up 0.6 percent from the previous year. The median sales price for a single-family home in June was $266,200, a year-over-year increase of 6.6 percent.

The rate of condominium and co-op sales stood at 640,000, unchanged from May but up 1.6 percent from June 2016. The median sales price for this type of property was $245,900, up 6.5 percent from the previous year.

The challenges related to inventory, availability, and cost kept more first-time homebuyers away from the market in June. Thirty-two percent of existing home sales during the month were to people purchasing their first home, down from 33 percent in both May and June 2016. This share also fell below the annual share of 35 percent for 2016 as a whole.

"It's shaping up to be another year of below average sales to first-time buyers despite a healthy economy that continues to create jobs," said Yun. "Worsening supply and affordability conditions in many markets have unfortunately put a temporary hold on many aspiring buyers' dreams of owning a home this year."

William E. Brown, president of the National Association of Realtors, said buyers stymied by low inventory luck may have better luck if they extend their home search into the late summer and autumn.

"The pool of buyers this time of year typically begins to shrink as households with children have likely closed on a home before school starts," said Brown. "Inventory remains extremely tight, but patience may pay off in coming months for those looking to buy."

Mortgage rates also proved more favorable to buyers, with the average rate for a 30-year fixed rate conventional mortgage dropping for the third month in a row. According to Freddie Mac, the typical rate fell from 4.01 percent in May to 3.9 percent in June. The average rate for 2016 as a whole was 3.65 percent.

Investor purchases slowed down in June, accounting for only 13 percent of existing home sales. This share was unchanged from the previous year and down from 16 percent in May. Fifty-six percent of investors bought a property without financing, but the share of all-cash sales dropped from 22 percent in both May and June 2016 to 18 percent. This was the smallest share since June 2009, when all-cash purchases made up just 13 percent of existing home sales.

Only 4 percent of June's existing home sales were distressed sales, matching a low set in September. Foreclosures made up 3 percent of sales and typically sold in 57 days, while 1 percent of transactions were short sales with a median time of 102 days on the market.

The Midwest was the only region with a boost in sales, which were up 3.1 percent from May to an annual rate of 1.32 million – matching the rate of June 2016 in the region. The median sales price in the region climbed 7.7 percent from the previous year to $213,000.

In the Northeast, the pace of existing sales fell 2.6 percent from the previous month to 760,000 but remained 1.3 percent above the previous year's levels. The median sales price was up 4.1 percent to $296,300.

The sales pace of 2.23 million in the South was unchanged from June 2016 but down 4.7 percent from May. The median sales price in the region increased 6.2 percent to $231,300.

In the West, the sales rate was down 0.8 percent from May to 1.21 million. This pace was still 2.5 percent higher than in June 2016. The median sales price jumped 7.4 percent to $378,100.