Home prices pushed higher in many metros areas in the first quarter of 2015 due to stronger demand and tight inventory levels, according to the latest quarterly report from the National Association of Relators.

NAR’s Chief Economist Lawrence Yun says after moderating to healthier levels of growth at the end of 2014, prices picked up in several metro areas during the first quarter.

“Sales activity to start the year was notably higher than a year ago, as steady hiring and low interest rates encouraged more buyers to enter the market,” he said. “However, stronger demand without increasing supply led to faster price growth in many markets.” 

“Sales could soften slightly in some of these markets seeing sharp price appreciation unless housing supply markedly improves and tempers its unhealthy level of growth,” Yun said.

The median existing single-family home price jumped in 85% of measured markets, with 148 out of 174 metropolitan statistical areas showing gains based on closings in the first quarter compared with the first quarter of 2014.

Twenty-five areas (14%) recorded lower median prices from a year earlier.

Additionally, the number of rising markets in the first quarter was mostly unchanged compared to the fourth quarter of last year, when price increases were recorded in 85% of metro areas. 

Fifty-one metro areas in the first quarter (28%) experienced double-digit increases, a sharp increase from the 24 metro areas in the fourth quarter of 2014. Thirty-seven metro areas (22%) experienced double-digit increases in the first quarter of 2014.

The national median existing single-family home price in the first quarter was $205,200, up 7.4% from the first quarter of 2014 ($191,100). The median price during the fourth quarter of 2014 increased 6% from a year earlier.

“Homeowners throughout the country have enjoyed accumulating household wealth through the steady rise in home values in the past few years,” says Yun. “However, some homeowners are hesitant to move-up and sell because they aren’t confident they’ll find another home to buy. This trend – in addition to subpar homebuilding activity – is leading to the ongoing inventory shortages and subsequent run-up in prices seen in many markets.”

Total existing-home sales, including single family and condo, declined 1.8% to a seasonally adjusted annual rate of 4.97 million in the first quarter from 5.06 million in the fourth quarter of 2014. However, this is 6.2% higher than the 4.67 million pace during the first quarter of 2014.

At the end of the first quarter, there were 2 million existing homes available for sale, slightly above the 1.96 million homes for sale at the end of the first quarter in 2014.

The average supply during the first quarter was 4.6 months – down from 4.9 months a year ago. A supply of 6 to 7 months represents a healthy balance of supply between buyers and sellers.