According to The Wall Street Journal's quarterly survey of housing-market conditions, inventory levels of homes for sale have fallen in all 28 metropolitan areas tracked in the survey.
At the current pace of sales, there was just one month of supply in Sacramento, Calif., where inventory fell by 56% from one year ago. The months' supply stood at 2.4 in Phoenix, 2.8 in California's Orange County, 3.2 in San Diego and San Francisco, and 3.6 in Los Angeles.
Housing demand began gaining pace a year ago as prices in many hard-hit markets had fallen so far that investors began scooping up homes at substantial discounts. Rising rents have encouraged many such investors to rent out the houses, rather than putting them on the market and trying to flip them for a profit.
More recently, demand among traditional buyers has jumped amid continued declines in interest rates that have made homes, based on monthly mortgage payments, more affordable than at any time in at least 15 years. The Mortgage Bankers Association said loan applications for home purchases rose 22% in the first week of November from one year earlier.
Median home prices have now risen for eight consecutive months, which last occurred in early 2006, just before the housing bubble burst. In part, that reflects an increase in sales of more-expensive homes. Sales of homes priced below $100,000 fell by 0.6% from one year ago in October, while sales of homes priced between $750,000 and $1 million rose by 53%.
Craig Moll, of Clearwater, Fla., said his biggest hurdle in buying a home was that there "weren't many to choose from." Mr. Moll sold a townhouse in 2009, as the housing market deteriorated. "Over the course of about a month, the entire opposite side of the street turned into rentals as the market started to crash," he said.
Now, with mortgage rates at historic lows and home prices "creeping back up, it felt like our time to buy something," he said. This summer, he paid $340,000 with a 10% down payment for a four-bedroom home with a swimming pool in Clearwater. "It wasn't a great deal. It was a good deal," he said.
Still, housing markets face headwinds, including stringent mortgage-lending standards. Mr. Moll, who is self-employed and advises insurance companies on weather-related car damages, said getting approved for a mortgage was "very, very difficult."
The Realtors' group also warned that November's home sales could drop due to Sandy, the superstorm that battered the Atlantic coast from southern New Jersey to New York's Long Island and Connecticut, at the end of October.
Some buyers already have pulled out of sales agreements while other homes that were under contract must be re-inspected or repaired before banks will finance loans. Compared with September, home sales fell by 1.7% on a seasonally adjusted basis in the Northeast; that contrasts with gains of 4.4% in the West, 2.1% in the South and 1.8% in the Midwest.
Another wildcard: Whether Congress avoids the "fiscal cliff," a series of tax increases and spending cuts set to kick in at year-end, which some real-estate agents worry could undercut consumer confidence, potentially deferring some sales.
A version of this article appeared November 20, 2012, on page A3 in the U.S. edition of The Wall Street Journal, with the headline: Housing Market Posts Gains.