BUSINESS

Limited supply lowers measure of US pending home sales, though index rises from year earlier

01/28/2013 10:16 EST | Updated 03/30/2013 05:12 EDT
WASHINGTON - A measure of Americans who signed contracts to buy homes fell last month after reaching a 2 1/2-year high in November. Sales were held back by a limited supply of available homes.

The National Association of Realtors says its seasonally adjusted index for pending home sales dropped 4.3 per cent to 101.7 in December. That's still 6.9 per cent higher than it was a year ago.

The decline signals that sales of previously occupied homes may drop in the coming months. There's generally a one- to two-month lag between a signed contract and a completed sale.

Still, sales of previously occupied homes rose last year to their highest level in five years. And the Realtors' group forecasts that sales will rise 9 per cent this year as the housing market steadily recovers.