The median sales price in March climbed 6.8 percent over the past year to $236,400, significantly outpacing wage growth.
However increased competition caused homes to soar off the market as properties typically stayed on the market for 34 days in March, down significantly from 45 days in February and 47 days a year ago.
The report said existing home sales jumped 4.4 percent to an annual rate of 5.71 million in March after slumping by 3.9 percent to a downwardly revised 5.47 million February.
Buyers closed on purchases of 12,245 homes, at an average price of $163,382 - up 6.2 percent from the same month of previous year.
Despite rising prices and tight inventories, sales of USA existing homes rebounded in March, surging to the highest rate in 10 years, an industry group reported Friday. Sales for the first three months of the year were 5% higher than in 2016.
That beat the record set in January as the strongest sales since February 2007, and was 5.9 percent above a year ago.
At March's sales pace, it would take 3.8 months to clear the stock of houses on the market, unchanged from February. "Sales may be soaring, but inventory isn't". And 48 percent of the existing homes that sold in March had been on the market for less than a month, the national Realtors said.
In March, sales rose in the Northeast, Midwest and South but declined in the West.
"Last month's swift price gains and the remarkably short time a home was on the market are directly the result of the homebuilding industry's struggle to meet the dire need for more new homes", Mr. Yun concluded.
Tight inventory is still the biggest factor in the marketplace: supply was 6.6% lower compared to a year ago.
The housing market needs more inventory for sales to pick up meaningfully, he notes.
"Early signs from this spring season point to an incredibly competitive market", Svenja Gudell, chief economist for the Zillow real estate data company, said in an emailed response to Friday's national housing report.
The average sale price for a house in the region, an 18-county area covered by the listing service, was $150,142 in March, up 10.2 percent from a year before.