The January reading of 122.8 represented a 2.8% decline from December.
Limited supply drove the month-over-month slide in pending sales, NAR Chief Economist Lawrence Yun said in a release, noting that a sustained rise in new-home permits and requests indicates the supply-demand imbalance could ease as early as midyear.
“There will also be a natural seasonal upswing in inventory in spring and summer after few new listings during the winter months,” he said. “These trends, along with an anticipated ramp-up in home construction will provide for much-needed supply.”
By region, the Southeast posted the healthiest year-over-year growth in pending sales, which were up 17.1%. The Southeast was the only region to see a month-over-month increase in sales, which ticked 0.1% higher.
The Northeast saw the index rise 9.6% year over year and fall 7.4% on a monthly basis, while in the Midwest, the index rose 8.6% annually and dipped 0.9% month over month. In the West, pending sales dropped 7.8% on a monthly basis and climbed 11.5% year over year.