Rising for a third consecutive month, sales of existing homes in June hit the fastest pace in eight months, signaling that the housing market’s recovery hasn’t petered out.

The National Association of Realtors reported Tuesday that sales of existing homes grew 2.6% in June to a seasonally adjusted annual rate of 5.04 million.

Conditions are becoming more balanced, said Lawrence Yun, NAR’s chief economist. “Inventories are at their highest level in over a year and price gains have slowed to much more welcoming levels in many parts of the country,” Yun said.

Over the past year, escalating prices and mortgage rates hit housing demand. Slammed by a particularly harsh weather, sales of used homes in the first quarter were weak enough that economists expect sales of used homes for all of 2014 to wind up below last year’s final tally.

But some headwinds are abating, and there are reasons for optimism: Home-price growth is cooling off, more properties are available for sale, and the labor market is strengthening.

—Ruth Mantell

Left: A "for sale" sign stands outside a home in LaSalle, Ill., on June 7.

Next: Sales of used homes highest since October

The 5.04 million sales pace for existing homes in June slightly exceeded the consensus forecast from economists polled by MarketWatch , who had expected the sales rate to increase to 5 million in June from an originally reported 4.89 million in May. On Tuesday NAR revised May’s sales rate to 4.91 million.

A strengthening labor market, more homes on the market, and cooling price growth are all driving sales, economists say.

Officials have been worried about the stalling recovery in the housing market. Federal Reserve Chairwoman Janet Yellen recently told U.S. lawmakers that the housing sector has “shown little recent progress,” and that readings this year “continued to be disappointing.” There will be a fresh snapshot on the sales market for new homes later this week.

Next: Home prices cooling off

Also Tuesday, NAR reported that the median price for existing homes hit $223,300 in June, up 4.3% from the year-earlier period.

That 4.3% increase was the slowest annual growth since March 2012 — reflecting the larger number of homes available for sale and a market that is no longer able to sustain sprinting increases.

June saw prices rise in three of four U.S. regions: up 7.2% in the West, 4.6% in the Midwest and 3.4% in the South. Meanwhile, prices ticked down 0.1% in the Northeast.

Next: More homes available for sale

A greater number of homes on the market is helping to slow down price growth, a trend that buyers are sure to like.

June’s inventory was 2.3 million existing homes for sale — the greatest number of homes available for sale since August 2012 — up 6.5% from the year-earlier period.

As prices raced higher over the past year, more sellers became willing and able to place their homes on the market.