Pending home sales dipped 0.4% to an index reading of 104.8 in February, after a revised 3.9% jump to 105.2 in January, according to a report released Wednesday by the National Association of Realtors.
The decline matched the expectations of economists polled by Thomson Reuters, who predicted that the index would be down 0.5%.
January’s rise was initially reported as a 4.5% jump to a 105.9 index.
An index of 100 is equal to the average level of contract activity during 2001.
Year-over-year the pending homes sales index is up 8.4% from last February, when the index was 96.6.
Regionally, pending sales results were mixed. The Northeast saw a 2.5% decrease to 82.8, while sales rose 0.4% in the Midwest to 103.6. In the South, sales fell 0.3% to 118.8, and sales inched up 0.1% to 101.4 in the West.
Lawrence Yun, NAR chief economist, said limited inventory is holding back the market in many areas.
“Only new home construction can genuinely help relieve the inventory shortage, and housing starts need to rise at least 50 percent from current levels,” Yun said. “Most local home builders are small businesses and simply don’t have access to capital on Wall Street. Clearer regulatory rules, applied to construction loans for smaller community banks and credit unions, could bring many small-sized builders back into the market.”
Yun projects existing-home sales to rise about 7 percent in 2013 to approximately 5 million sales, which is near the current level of activity.
“The volume of home sales appears to be leveling off with the constrained inventory conditions, and the leveling of the index means little change is likely in the pace of sales over the next couple months,” he said.
