Elevated home values continued to price out many would-be buyers in June, according to the latest existing home sales report from the National Association of Realtors. However, the month's data also showed some encouraging signs, including the first uptick in housing inventory in three years.

The seasonally adjusted annual rate for existing home sales in the United States—including single-family homes, condominiums, townhomes, and co-ops—stood at 5.38 million. This was down 0.6 percent from a downwardly revised figure of 5.41 million in May, as well as a year-over-year drop of 2.2 percent.

"There continues to be a mismatch since the spring between the growing level or homebuyer demand in most of the country in relation to the actual pace of home sales, which are declining," said Lawrence Yun, chief economist at the National Association of Realtors. "The root cause is without a doubt the severe housing shortage that is not releasing its grip on the nation's housing market. What is for sale in most areas is going under contract very fast, and in many cases has multiple offers. This dynamic is keeping home price growth elevated, pricing out would-be buyers and ultimately slowing sales."

The average home sold in June found a buyer after 26 days on the market. This average has not changed in three months, but was two days faster than in June 2017. Fifty-eight percent of homes were sold within a month of being listed.

Scarce inventory has also been driving up home prices, with June marking the 76th consecutive month where the national median home price has grown on an annual basis. June's median home price of $276,900 exceeded May's record high and marked a 5.2 percent year-over-year increase.

The median price for a single-family home was $279,300, a year-over-year gain of 5.2 percent. The seasonally adjusted annual sales pace for this type of home shrank 0.6 percent from May and 2.3 percent from June 2017 to 4.76 million.

Condominium and co-op sales had a seasonally adjusted annual rate of 620,000 units, on par with the previous month but 1.6 percent lower than the previous year. The median price for this type of home increased 4.9 percent from June 2017 to $258,100.

Breaking a 36-month trend of dwindling housing inventory, the number of existing homes for sale increased in June. There were 1.95 million properties listed during the month, up 4.3 percent from May and 0.5 percent from June 2017. However, Yun cautioned that this trend needs to continue and accelerate to alleviate ongoing affordability issues.

"It's important to note that despite the modest year-over-year rise in inventory, the current level is far from what's needed to satisfy demand levels," he said. "Furthermore, it remains to be seen if this modest increase will stick, given the fact hat the robust economy is bringing more interested buyers into the market, and new home construction is failing to keep up."

Elizabeth Mendenhall, president of the National Association of Realtors, said the increase in listings could nevertheless be a good sign for buyers who weren't able to find a home during the competitive spring season.

"As summer winds down, the number of home shoppers begins to decrease," she said. "Listings are still scarce—especially for entry-level homes—but patience may yield a positive result for those looking to buy in the months ahead."

June's buyers also saw a bit of relief from rising mortgage rates. According to Freddie Mac, the average commitment rate for a 30-year fixed rate mortgage was 4.57 percent during the month. This was down from 4.59 percent in May, but still higher than the average rate of 3.99 percent for 2017 as a whole.

First-time buyers made up 31 percent of the month's sales, a drop from 32 percent in both May and June 2017. It was also down from the share of 34 percent identified in the National Association of Realtors' 2017 Profile of Home Buyers and Sellers.

"Realtors throughout the country continue to stress that there's considerable pent-up demand for buying a home among millennial households in their market," said Yun. "Unfortunately, they're just not making meaningful ground, and continue to be held back by too few choices in their price range, and thereby missing out on homeownership and wealth gains."

More buyers were purchasing a home without financing, with all-cash transactions making up 22 percent of June's existing home sales. This was up from 21 percent in May and 18 percent in June 2017.

While individual investors often account for many cash sales, they were less prevalent in June's sales. Individual investors accounted for 13 percent of sales, unchanged from the previous year and a drop from 15 percent in May.

Just 3 percent of June's sales were distressed properties, tying a survey low set in May and down from 4 percent in June 2017. Two percent of all sales were foreclosures, while 1 percent were short sales.

In the Northeast, the annual existing home sales rate of 720,000 marked an increase of 5.9 percent from May but was still down 4 percent from June 2017. The median price for a home in the region increased 3.3 percent from the previous year to $305,900.

The Midwest had a similar trend, with its annual sales rate increasing 0.8 percent from the previous month but falling 3.1 percent from the previous year to 1.27 million. The median existing home price rose 3.5 percent to $218,800.

Existing home sales were down 2.2 percent from May in the South, but the annual rate of 2.25 million was up 0.4 percent from June 2017. The median price for a home in the region was up 2.7 percent to $237,500.

In the West, the median home price soared 10.2 percent to $417,400. The annual sales rate fell 2.6 percent from the previous month and 5 percent from the previous year to 1.14 million.