After reaching a 19-month high, pending home sales eased in December but stayed above year-ago levels, according to the NATIONAL ASSOCIATION OF REALTORS®.

The Pending Home Sales Index, which measures home sales contracts that haven’t yet closed, declined 3.5% in December but is 5.6% above December 2010.

The trend line remains positive, said NAR Chief Economist Lawrence Yun. “Even with a modest decline, the preceding two months of contract activity are the highest in the past four years outside of the home buyer tax credit period,” he said. “Contract failures remain an issue, reported by one-third of REALTORS® over the past few months, but home buyers are not giving up.”

Some buyers successfully complete the sale after a contract delay, while others stay in the market after a contract failure and make another offer. “Housing affordability conditions are too good to pass up,” he said. “Our hope is lending conditions will gradually improve with sustained increases in closed existing-home sales.”

Regional home sales contracts

The PHSI in the Northeast declined 3.1% in December and is 0.8% below a year ago. In the Midwest, the index rose 4.0% is 13.3% higher than December 2010. Pending home sales in the South slipped 2.6% in December but are 4.9% above a year ago. In the West, the index fell 11.0% in December but is 3.7% higher than December 2010.

Source: NAR