In the heart of the busiest season for housing, homesellers are pulling back.

Inventory continues to be tight in many markets, so what has potential home sellers pulling back when buyer demand is reportedly so high?  Inventory fell 3.2% in April from last year, the seventh-straight month of declines, according to Redfin. Inventory is at historic lows in some west coast communities, and given the lack of new listings, it will likely go lower.

Low mortgage rates, job growth and other drivers have stoked buyer demand, but the supply of homes for sale — especially in the low-to-middle price ranges — hasn't kept pace, leaving many would-be buyers struggling with a thin and increasingly expensive inventory.  These tight conditions are fueling buyer competition in the more affordable price ranges, driving up home prices in these markets and disproportionately affecting first-time and low- to middle-income homebuyers. The median home price for all housing types increased 6.3% in April as compared to last year, according to the National Association of REALTORS®.

Trade-up buyers and luxury buyers, on the other hand, seem to be losing their mojo heading into the heart of the spring selling season.  Repeat buyers tend to list early because they are most likely also looking for another home to buy in the near future. A slowdown in new listings reflects a lack of confidence on the part of the homeowner that they can find a desirable home to purchase.

Silicon Valley, the most-expensive U.S. housing market, is seeing a pullback by the wealthiest homebuyers after a four-year real estate boom marked by bidding wars and multimillion-dollar prices. Stock-market turmoil, a drop in foreign investors and concerns of a technology-industry slowdown are cooling demand at the high end.

The overall market is getting very little help from homebuilders, who are increasing production but at nowhere near the levels of current or even historical demand. Builders blame the high costs of land, labor and increased regulation for the slow recovery in construction.

Homeowners and home buyers overall seem to be more conservative with their real estate investments; likely a backlash from the Great Recession, which crippled the public’s confidence in the real estate market.  Home buyers are prioritizing affordability over size and luxury, concentrating interest in the median-range market, while homeowners are refraining from trading up and reinvesting.  This concentrated interest and lack of inventory is a big obstacle for homebuyers today.