Jul 8, 2015, 2:06pm MST

Phoenix housing prices continued to rise for the month of May, but folks looking to enter the Phoenix housing market may be relieved to hear that tight supply for mid-range homes may ease up as more building permits have been issued, according to new data released by Arizona State University.

Building permits for homes priced in the $200,000 to $500,000 range saw a relatively small increase in the past two months, but buyers looking to enter the market with an affordable home may still face competition, said Michael Orr, who released the report Wednesday.

"This is causing problems for buyers who are experiencing multiple bids in the range below $200,000," Orr said in his report.

Gilbert led the Valley in receiving the new building permits with Peoria, Mesa and North Phoenix not far behind.

Orr, who serves as director of ASU's Center for Real Estate Theory and Practice, doesn't see much supply relief in the near future for the entry-level homes because many new home permits issued are for move-up homes, he said.

The increase in issued permits wasn't enough to make a dent in the number of homes available across the Valley, Orr said.

The modest increase in permits may keep prices from skyrocketing, but supply of homes is still quite a way from being what is considered normal in Phoenix, he said.

May housing prices were similar compared to April, Orr said, as the lack of supply still continued to drive the prices up since demand has returned to normal.

Single-family home sales rose 1 percent in May over April and 7 percent from the previous year, Orr said, and the median sales price jumped 5.2 percent for single-family homes from April to May and 11.5 percent from May 2014, Orr said.

Data isn't out yet for June, but Orr expects it to be another strong month for home sales. Activity may start to slow down in July and August, as is the historical trend due to higher temperatures.

The warmer months typically see less activity than the rest of the year and that means price increases could stop then, Orr said, but price increases should be expected to come back if supply issues persist by the end of September.

And the luxury home market hasn't seen the same supply issues as the entry level market has, but the number of luxury homes sold is expected to be down by the end of the second quarter, Orr said.