NEW YORK ( TheStreet) -- Homebuyers have been chasing a limited supply of homes at a frenzied pace for months, but there are signs that they may be running out of breath. According to real estate broker Redfin , the percentage of homes that went under contract within two weeks decreased for the third consecutive month in July, falling to 29.2% from 20% in June and 32% in April. Of course, this is still a frenetic pace. Last July only 20.5% of homes went pending within two weeks. In July 2011, only 12.6% sold that fast. Plus, this is vacation season, so maybe they will come back. But it could be that rising home prices and higher interest rates are giving buyers reason to take a break. The National Association of Realtors said Wednesday that existing home sales rose 6.5% to a seasonally adjusted annualized rate of 5.39 million units, a four-year high. But it reported that inventory conditions were still very tight. The average time on the market was 42 days, up from 37 in June. About 45% of homes sold in July were on the market for less than a month. Home prices are rising sharply amid this shortage of supply, even though higher interest rates is likely to moderate future gains. The NAR report said median home prices rose 14% from a year earlier in July. The FHFA said Thursday that prices of homes purchased with loans from Fannie Mae and Freddie Mac rose 7.5% over the last four quarters. The Redfin Fastest Real Estate Markets Report ranks 23 markets across the country measured by the percentage of homes that go under contract within two weeks of their debut. The metrics include single-family homes, condos, and townhouses listed in the Multiple Listing Service. California remains the fastest market. In San Jose, 45% of new listings went into contract within two weeks, down slightly from 46.3% in June. Three other California cities -- San Francisco, Ventura and San Diego -- also top the list of the fastest markets. Las Vegas and Raleigh, N.C. saw the fastest pick-up in the pace of homes being snatched off the market in July. About 29% of the homes in Vegas went into contract in less than two weeks from listing, up from 18% in June.
The cities that saw the most slowdown in the market in terms of demand were Seattle and Washington D.C, with the rate of homes going under contract within two weeks slowing 3.2 and 3 percentage points, respectively. It is still a sellers' market in every metro, though Philadelphia might be heading toward a more balanced market. At the current sales pace, it would take 5.3 months to exhaust all the supply of existing homes in Philadelphia, according to Redfin. In a balanced market, the months' supply of homes is typically six months. -- Written by Shanthi Bharatwaj New York. >Contact by Email. Follow @shavenk