Pending home sales were flat in January as winter weather and limited inventory held down home shopping.
The National Association of Realtors (NAR) sales index, which is a forward-looking indicator based on contract signings, ticked up 0.1 percent to 95 in January from an upwardly revised 94.9 in December, but is 9 percent below the January 2013 level of 104.4.
“Increasing new home construction can quickly solve two problems, producing more inventory and taming price growth,” said Lawrence Yun, NAR chief economist.
The December index reading was the lowest since November 2011.
There is usually a lag of a couple of months between signing a contract and closing on a home purchase.
Monthly gains in the South and Northeast were offset by declines in the West and Midwest and regionally, the index rose in the Northeast by 2.3 percentage points to 79 in January, but is 5.3 points below a year ago.
In the Midwest the index declined 2.5 percentage points to 92.9 and is 9.3 points lower than a year ago. Also, the index rose 3.5 points in the South to 111.2 but is running 5.5 points below last year's level. And in the West, the index fell 4.8 points to 84.2, and is 17.5 points below January 2013.
The pace of sales are expected to pick up in the middle part of the year. Total existing-home sales are projected at just over 5 million in 2014, slightly below the volume recorded last year. The national median existing-home price is forecast to grow in the range of 5 to 6 points this year, NAR said.