Pending home sales declined in December as inventory tightened, but they were up compared to a year earlier, according to a national index released Monday.
The National Assn. of Realtors said its pending home sales index fell 4.3%, to 101.7, compared to the previous month, but was up 6.9% from December 2011. An index level of 100 is considered a healthy level of pending sales.
The forward-looking indicator is based on the number of purchase contracts signed for existing homes. A sale is usually completed within one or two months.
Lawrence Yun, NAR chief economist, blamed the December decline chiefly on a tightening market.
“The supply limitation appears to be the main factor holding back contract signings in the past month. Still, contract activity has risen for 20 straight months on a year-over-year basis,” he said in a statement.
In the West, the index dropped 8.2% last month to 101, and declined 5.3% from a year earlier.