Pending home sales declined in January, dropping 8.9 percent from year-ago levels, although some evidence is emerging to suggest that the rate of decline in pending home sales is slowing. The gap between year-ago levels stood at 14.7 percent in July 2006, and has steadily narrowed since that time. Bucking the best practices of most economic analysis, the National Association of Realtors preferred to look at month-to-month trends in analyzing the movement of the pending sales index, alleging that January's pending sales index numbers were lower than December's due to a cold weather snap during the first month of the year. Pending sales registered the largest monthly gain in nearly three years this past December, rising 4.5 percent, the largest increase since a 6.1 percent jump in March 2004. â€œWe are seeing temporary near-term weather disruptions in much of the country, but there is an underlying pattern of stabilization in the housing market,â€? NAR chief economist David Lereah said. â€œAs a result of these weather disruptions, it may take a couple months for the picture to fully clarify, but a modest recovery is likely. Housing remains a great long-term investment.â€? Based on research conducted by HW, neither January 2006 nor January 2007 would qualify as a "cold" month; January 2006 was the warmest January on record for the United States, according to data compiled by U.S. Department of Commerce, while January 2007 was colder by comparison but still well above the 20th century average for the month. â€œThe rapid shift in January to frigid air in much of the country had a cooling affect on home shopping that went beyond normal seasonal factors,â€? Lereah said, alluding to the cold-weather explanation the NAR put forth. â€œWeather disruptions have continued since.â€? The index is derived from pending sales of existing homes. A sale is listed as pending when the contract has been signed and the transaction has not closed; pending sales typically are finalized within one or two months of signing. Regional values for the pending home sales index all remained below year-ago levels, the NAR reported. In the Northeast, pending sales remained 1.3 percent below year ago levels; pending sales in the West were 7.0 below year-ago levels, while pending sales in the Midwest remained 2.4 below year ago levels. Pending sales slowed strongly in the South, coming in 11.8 percent below January 2006's reporting index values. For more information, visit http://www.realtor.org.