As demand for housing continues to grow, one of the key factors holding back growth is the limited number of available homes on the market. Mark Fleming, First American's chief economist, commented on this "weird" phenomenon in a recent CNBC story that points again to the supply problem at the heart of housing today.

"Existing-homes sales are currently below expectations because it's hard to be a buyer if at first you can't be a seller," said Fleming.

"The fact that actual existing home sales volumes were lower than market capacity, yet house prices are increasing, indicates that the market is experiencing supply constraints more than demand constraints," said Mark Fleming, chief economist at First American.

In general, the housing market is underperforming because both homebuilders and home sellers are underperforming. Despite growing purchase demand and modest gains in equity, housing starts are still well below the historical average and sellers are still not willing to list at current prices. 

"Existing-homes sales are currently below expectations because it's hard to be a buyer if at first you can't be a seller," said Fleming. "Without the constraint of insufficient equity, many more homeowners would be willing to sell their homes, especially given the continued low interest rate environment and increased certainty in labor markets."

View this story on CNBC.com