Is it the winter weather, a slowdown in housing or a combination of both that caused real estate contract signings to cool in December?
Whichever factor is ultimately blamed, it is now clear that pending home sales fell a significant 8.7% from November to December, reaching an index score of 92.4 last month, according to the National Association of Realtors' Pending Home Sales Index.
That score is down from a revised index score of 101.2 in November, and down 8.8% from 101.3 in December.
Pending home sales is a forward-looking indicator that measures the number of real estate contracts signed, but not closed.
NAR admits data for December shows the index at its lowest level since October 2011 when the index score hit 92.2. Ultimately, Realtors see the weather as contributing to the mid-winter slowdown.
"Unusually disruptive weather across large stretches of the country in December forced people indoors and prevented some buyers from looking at homes or making offers," said Lawrence Yun, NAR chief economist.
"Home prices rising faster than income is also giving pause to some potential buyers, while at the same time a lack of inventory means insufficient choice. Although it could take several months for us to get a clearer read on market momentum, job growth and pent-up demand are positive factors."
Contract signings went down in all four regions of the country.
The Northeast Pending Home Sales Index plummeted 10.3% to 74.1 in December, and is 5.5% below year ago levels. The Midwest index fell 6.8% to a score of 93.6 in December and is 6.9% lower than December 2012 levels. The index for the South declned 8.8% to a score of 104.9, which is 6.9% below year ago levels, while the West Index dropped 9.8% in December from November and 16% from a year earlier.
NAR expects total existing home sales for this year to close at 5.1 million, which is in line with 2013 data. Inventory remains limited across the U.S., creating the possibility of escalating prices. NAR expects the national median existing-home price to rise about 5.4% in 2014.