The pending sales of homes in the United States slowed down in October, according to the National Association of Realtors. However, the rate of these sales was considerably stronger than it was a year ago.

The Pending Home Sales Index, an indicator maintained by the National Association of Realtors, stood at 106.7 for the month. This was down 1.7 percent from September, but a year-over-year increase of 4.4 percent.

Pending sales are defined as transactions where a contract has been signed but the sale has not yet been closed – an action that typically takes place within a couple of months. An index of 100 is equal to the pending sales rate of 2001, which fell between 5 and 5.5 million; this is considered normal for the current U.S. population.

"While contract signings have decreased, the overall economic landscape remains favorable," said Lawrence Yun, chief economist at the National Association of Realtors. "Mortgage rates continue to be low at below 4 percent—which will attract many buyers—employment levels are strong, and many recession claims have dissipated."

Yun continued to point to inventory as a constraining factor on the housing market. He said that while many buyers encounter a limited number of residences for sale in their preferred market. This trend has helped contribute to rising home prices, which can put homeownership out of reach for potential buyers.

"We risk a lingering shortage of sufficient inventory if homebuilding only continues at its current pace over the next 20 years, when the U.S. population is projected to increase by more than 40 million over this period," said Yun. "Clearly, home builders must step in and construct more housing."

In each of the four geographical regions outlined by the National Association of Realtors, pending sales were up from the previous year. The Northeast was the only region with a monthly gain; its index of 95.7 was up 1.9 percent from September and 3 percent from October 2018.

The Pending Home Sales Index of 101.4 in the Midwest was down 2.7 percent from the previous month but up 1.8 percent from the previous year. In the South, the index fell 1.7 percent to 125.3 – a year-over-year gain of 5.1 percent. The Pending Home Sales Index in the West fell 3.4 percent from September, but was up 7.5 percent from October 2018.