Pending home sales plunged 8.7% to an index reading of 92.4 in December, after a revised 0.3% decline to 101.2 in November, according to a report released Thursday by the National Association of Realtors.
NAR suggested abnormally cold weather was partly to blame for the decline.
The November reading was initially reported as 0.2% drop to 101.7.
Economists polled by Thomson Reuters predicted that the index would be flat.
An index of 100 is equal to the average level of contract activity during 2001.
Year-over-year the pending homes sales index is off 8.8% from last December, when the index was 101.3. the index has not been this low since it was 92.2 in October 2011.
Regionally, pending sales were down. The Northeast saw a 10.3% drop to 74.1, while sales fell 6.8% in the Midwest to 93.6. In the South, sales slid 8.8% to 104.9, and sales declined 9.8% to 85.7 in the West.
"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," NAR Chief Economist Lawrence Yun 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."
