Rising home prices and interest rates are worsening affordability and damping home sales across the country. But the West, which has seen a particularly sharp run-up in prices in this six-year housing rebound, is bearing the brunt of the slowdown.

“The West region has the fastest job-growing regions in the country, yet sales are coming down” because prices have risen so much, said Lawrence Yun, chief economist at the NAR.

Twenty-six percent of California households could afford to purchase a home at the median price of $596,730 in the second quarter, down from 31% in the first quarter, according to a separate report released Wednesday by the California Association of Realtors. In 2012, 56% of households could afford to purchase the median-price home.

Mr. Yun said the tax bill, which went into effect in January and reduced the incentives for homeownership in more expensive markets, isn’t having a major effect. But anecdotally, realtors suggest that it is having a small impact in high-tax spots such as New Jersey, Connecticut and the top end of the California market.

“Right now I would say the tax impact is isolated” to small pockets around the U.S., Mr. Yun said.

The housing market cooled in metropolitan areas across the country in the second quarter, with the pace of sales slowing 2.4% compared with a year ago, according to the NAR.

Mr. Yun blamed a lack of supply for the weak second-quarter sales numbers. Supply ticked up by 0.5% in the second quarter compared with a year earlier but remains below normal levels, according to the NAR.

Price increases moderated for metro areas across the country, but affordability continued to worsen. The median existing single-family-home price rose 5.3% to hit a new record of $269,000. Two metropolitan markets—San Jose, Calif., and San Francisco—now have a median home price above $1 million. The typical home in the San Jose area now costs more than $1.4 million, while in San Francisco it costs $1.07 million.

Single-family home prices increased in 90% of 178 metropolitan areas measured by the NAR’s quarterly index. But in some welcome news for buyers, the pace of price increases has slowed. Only 13% of metro areas in the index saw double-digit price increases in the second quarter, down from 30% in the first quarter.

“As demand retreats somewhat, sellers understand they can’t be too aggressive in raising prices,” Mr. Yun.

The prospects of a strong pickup for the housing market in the latter half of the year don’t look terribly strong, according to economists. The share of people who feel now is a good time to buy a home fell four percentage points in July and the net share who say now is a good time to sell fell six percentage points, according to data released by Fannie Mae on Tuesday. The survey is often a good indicator of consumer behavior over the next year.

“People are getting nervous about paying up with house prices rising as fast as they are,” said Doug Duncan, Fannie Mae’s chief economist.