The National Association of Realtors' Pending Home Sales Index decreased 1.0% to 101.9 in February, down from 102.9 in January, the group reported Thursday. Year-over-year contract signings declined 4.9%, making this the fourteenth straight month of annual decreases.

The PHSI in the Northeast declined 0.8% to 92.1 in February, and is now 2.6% below a year ago. In the Midwest, the index fell 7.2% to 93.2 in February, 6.1% lower than February 2018. Pending home sales in the South inched up 1.7% to an index of 121.8 in February, which is 2.9% lower than this time last year. The index in the West increased 0.5% in February to 87.5 and fell 9.6% below a year ago.

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Lawrence Yun, NAR chief economist, said February’s pending home sales decline is coming off a solid gain in the prior month. “In January, pending contracts were up close to 5%, so this month’s 1% drop is not a significant concern,” he said. “As a whole, these numbers indicate that a cyclical low in sales is in the past but activity is not matching the frenzied pace of last spring.”

Yun said despite the growth in the West, the region’s current sales are well below the sales activity from 2018. “There is a lack of inventory in the West and prices have risen too fast. Job creation in the West is solid, but there is still a desperate need for more home construction.” Yun pointed to year-over-year increases in active listings from data at® to illustrate the potential rise in inventory. Denver-Aurora-Lakewood, Colo., Seattle-Tacoma-Bellevue, Wash., San Diego-Carlsbad, Calif., Portland-Vancouver-Hillsboro, Ore.-Wash., and Nashville-Davidson-Murfreesboro-Franklin, Tenn., saw the largest increase in active listings in February compared to a year ago.

Yun added that he does not anticipate any interest rate increases from the Federal Reserve in 2019. “If there is a change at all, I would say the Fed will lower interest rates in 2019 or 2020. That would stimulate the economy and the housing market,” he said. “But the expectation is no change at all in the current monetary policy, which will help mortgage rates stay at attractive levels.”

Yun expects existing-home sales this year to decrease 0.7% to 5.30 million, and the national median existing-home price to increase around 2.7%. Looking ahead to 2020, existing sales are forecast to increase 3% and home prices also around 3%.