The average home price for nondistressed properties increased 1.7% from April to May, suggesting that a decline in overall inventory is now pushing up prices, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.

The average price for a short sale still slipped 0.7%, while the price on damaged REO properties increased to 1.8% and 1.5% for move-in ready REOs.

In its latest HousingPulse Tracking Survey, Campbell Surveys cited declines in home inventory levels as one of the principal reasons for home price stabilization, especially in areas that have experienced large price declines in the past six years.

Multiple factors are causing the shortages — namely homeowners keeping their houses off the market while prices are still low. In addition, those who are underwater are staying in place and cannot move until more of the debt is paid down.

The survey also says appraisals are keeping prices down. The survey cites at least one real estate agent in Florida as saying appraisals are keeping prices from going up because appraisals that come in under the contract price are stopping "natural valid appreciation."

kpanchuk@housingwire.com