Pending home sales remain flat, according to the National Association of Realtors. But, it's not due to lack of demand, but rather the lack of decent product to sell.

Despite limited choices for buyers, home sales remain at relatively high levels.

"Only new home construction can genuinely help relieve the inventory shortage," said Lawrence Yun, chief economist for NAR, "and housing starts need to rise at least 50% from current levels."

The NAR pending home sales index slipped 0.4% to 104.8 in February from a downwardly revised 105.2 in January, but is 8.4% higher than February 2012 when it was 96.6. This is the highest reading since April 2010.

Yun projects existing-home sales to rise about 7% in 2013 to approximately 5 million sales, which is near the current level of activity.  “The volume of home sales appears to be leveling off with the constrained inventory conditions, and the leveling of the index means little change is likely in the pace of sales over the next couple months,” he said.

The level of pending home sales is little changed from last month's numbers, when the index showed a stronger return. Pending home sales rose in January, by way of comparison, continuing a 21-month trend of growth from year ago levels.

Home starts are increasing, though remain far below the levels favored by Yun. From last year, new home starts rose 27.7%, up slightly to 917,000 units in February, compared to 718,000 units in February 2012.

There will likely be little help in supply from existing homes coming onto the market.

From its peak three years ago, the nation's shadow inventory has fallen 28%, according to CoreLogic (CLGX), with 2.2 million units left sitting in the pipeline during the month of January.