Existing-home sales slipped in June, but ample pent-up demand and favorable buying conditions should keep the housing market from stumbling in the face of a recent surge in interest rates, the National Association of Realtors (NAR) said today.

“Affordability conditions remain favorable in most of the country, and we’re still dealing with a large pent-up demand,” said Lawrence Yun, chief economist at NAR.  “However, higher mortgage interest rates will bite into high-cost regions of California, Hawaii and the New York City metro area market.”

Amid the drop in home purchases, home prices continued to soar above year-ago levels, as inventory edged upwards, NAR said.

Existing-home sales dropped 1.2 percent to a seasonally adjusted annual rate of 5.08 million units in June from a downwardly revised 5.14 million in May, according to NAR.

During the same period, housing inventory rose 1.9 percent to 2.19 million homes, representing a 5.2-month supply of homes at the current rate of sales, NAR said.

That’s up from a five-month supply in May. But inventory in June was still 7.6 percent lower than a year ago, when there was a 6.4-month stock, according to NAR.

The national median existing-home price was $214,200 in June, NAR reported. That’s up 13.5 percent year over year and marks the 16 consecutive month of year-over-year increases, which last occurred from February 2005 to May 2006, according to the trade group.

June also represented the seventh straight month that home prices posted double-digit year-over-year increases, NAR said.