After three solid months, pending home sales took a step back, according to NAR’s latest analysis.

The Pending Home Sales Index, NAR’s measurement of contract signings for existing-home sales, fell 1.1 percent from May to June and 7.3 percent from June 2013, according to the latest analysis by the association.

Those declines came after three consecutive months of increases, and suggest that although housing rebounded somewhat during the spring homebuying season, we may be looking at more sideways growth for the rest of 2014; indeed, NAR’s own projects are for a 2.8 percent decline in existing home sales, though median existing-home price is expected to rise between 5 and 6 percent.

The Housing Situation in the U.S.

Lawrence Yun, NAR’s chief economist, blamed low inventory, flat wages and tight credit conditions for the lower contract signings, though he maintained that housing activity remains higher than at the start of the year.

As usual, there was regional divergence in the data: in the Northeast, pending sales were down 2.9 percent monthly and 3.2 percent yearly; in the Midwest, they were up 1.1 percent monthly but down 5.5 percent yearly; in the South, they were down 2.4 percent monthly and 4.3 percent yearly; and in the West, they rose 0.2 percent monthly, but remained 16.7 percent below last year’s level.

Predicting the Future

The Pending Home Sales Index is a very effective predictor of NAR’s own existing-home sales data, and according to Jed Kolko, the chief economist for Trulia, the next existing-home sales report (which will include contracts signed in June and May) will likely rise 2.5 percent or so month-to-month.

Also, though June’s contract signings were a bit disappointing, there is one key stat worth remembering – real estate in 2014 remains more active than in 2011 or 2012, a fact that the graph below (courtesy of The Wall Street Journal) makes perfectly clear: