The National Association of Realtors (NAR) announced on Thursday its seasonally adjusted pending home sales index (PHSI) fell 2.8 percent m-o-m to 122.8 in January 2021, after a revised 0.5 percent m-o-m advance in December 2020 (originally a 0.3 percent m-o-m decrease).

Economists had expected pending home sales to be flat m-o-m in January.

On y-o-y basis, the index rose 13.0 percent, following a revised 20.8 percent jump in December (originally a 21.4 percent m-o-m climb).

According to the report, three of all four regional indices recorded month-over-month decreases in January, but all four regions rose from one year ago, including two regions reaching double-digit gains. The Northeast PHSI plunged 7.4 percent m-o-m to 101.6 in January, but posted a 9.6 percent rise from a year ago. The index in the West fell 7.8 percent m-o-m in January, to 104.6, up 11.5 percent from a year prior. The PHSI for the Midwest dropped 0.9 percent m-o-m to 113.2 last month, up 8.6 percent from January 2020. Meanwhile, pending home sales in the South edged up 0.1 percent m-o-m to an index of 151.3 in January, up 17.1 percent from January 2020.

"Pending home sales fell in January because there are simply not enough homes to match the demand on the market," noted Lawrence Yun, NAR's chief economist. "That said, there has been an increase in permits and requests to build new homes."