Pending home sales measurably dropped in December, with abnormal weather partly inhibiting home shopping in much of the U.S., according to the National Association of Realtors (NAR). Declines were experienced in all four major regions.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, fell 8.7% to 92.4 in December from a downwardly revised 101.2 in November, and is 8.8% below December 2012 when it was 101.3. The data reflect contracts but not closings, and are at the lowest level since October 2011, when the index was 92.2.

Lawrence Yun, NAR chief economist, said several factors are working against buyers. “Unusually disruptive weather across large stretches of the country in December forced people indoors and prevented some buyers from looking at homes or making offers,” he said. “Home prices rising faster than income is also giving pause to some potential buyers, while at the same time a lack of inventory means insufficient choice. Although it could take several months for us to get a clearer read on market momentum, job growth and pent-up demand are positive factors.”

The PHSI in the Northeast dropped 10.3% to 74.1 in December, and is 5.5% below a year ago. In the Midwest the index declined 6.8% to 93.6 in December, and is 6.9% lower than December 2012. Pending home sales in the South fell 8.8% to an index of 104.9 in December, and are 6.9% below a year ago. The index in the West, which is most impacted by constrained inventory, dropped 9.8% in December to 85.7, and is 16% below December 2012.

Total existing-home sales this year should hold close to 5.1 million, essentially the same as 2013, but inventory remains limited in much of the country. The national median existing-home is projected to rise about 5.4% in 2014.

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