Tighter housing inventory is causing lenders to brace for potential headwinds as the nation plows toward 2014 and the enactment of new mortgage lending rules.

Rising home sales caused the nation's housing supply to tumble from a 6.4-month inventory in September to a 4.9-month supply in October, the Census Bureau residential sales report concluded this week.

"You will see the market improve as time goes by, but in the short run, we are anticipating a very rough first quarter for mortgage companies due to regular seasonal issues and high rates," said Brian Koss, executive vice president of Mortgage Network.

In addition to the tighter inventory and higher rates, upcoming mortgage regulations tied to the Dodd-Frank Act are expected to dent lenders' first-quarter earnings, Koss stated.

But while inventory may be tight, home sales continued to soar in October.

The sale of new single-family housing in October 2013 reached an annualized rate of 444,000 units, up 25.4% from September’s rate of 354,000 units, the Census Bureau said.  

Homebuilders are unable to build houses fast enough, and the permitting process is difficult, with affordable land still hard to find, Koss explained.

"We see a lot of ground breaking, but it takes awhile to get to market," Koss explained. "As time goes by, more and more resources are put into jumpstarting home prices and making it happen. They are still building, but it takes so long to get that machine going."

"One month is only one month, but the October new home sales report is a rare plus in what has been a run of weak news out of the housing sector," analysts with Econoday said.

Furthermore, the median sales price of new houses sold in October 2013 hit $245,800, down from $257,400 in September.