Pending home sales in December fell below the level of activity in 2001, according to the National Association of Realtors. However, the organization remained optimistic that sales will pick up this year after waning during 2018.

The Pending Home Sales Index for December fell 2.2 percent in December to a score of 99. This also marked a year-over-year decrease of 9.8 percent, the 12th straight month of annual declines.

The index measures sales activity against that in the year 2001, when the volume of existing home sales in the United States fell between 5 million and 5.5 million. This is considered normal for the nation's current population. An index of 100 is equal to the average contract activity in 2001.

"The stock market correction hurt consumer confidence, record high home prices cut into affordability, and mortgage rates were higher in October and November for consumers signing contracts in December," said Lawrence Yun, chief economist at the National Association of Realtors.

Yun said the partial government shutdown, which lasted a record 35 days before ending on Jan. 25, did not have any noticeable effect on home sales. He said some transactions may have been delayed and will likely move forward now that the shutdown has ended. However, he said it is likely that fewer homes will be sold if another shutdown takes place.

An increase in inventory in Western markets that have seen soaring price increases in recent years could result in accelerated sales there. Pending sales were up from November in the West, with its index increasing 1.7 percent to 88.4. However, this was still down 10.8 percent compared to December 2017.

Yun also said an easing of mortgage rates may help attract more buyers to the housing market. According to Freddie Mac, the average rate for a 30-year fixed rate mortgage was approaching 5 percent in November but has since fallen back to about 4.5 percent.

"The longer-term growth potential is high," said Yun. "The Federal Reserve announced a change in its stance on monetary policy. Rather than four rate hikes, there will likely be only one increase or even no increase at all. This has already spurred a noticeable fall in the 30-year, fixed-rate for mortgages. As a result, the forecast for home transactions has greatly improved."

In the Northeast, the Pending Home Sales Index climbed 2 percent to 93.2 in December. This index remained 2.5 percent lower than in December 2017.

The South has the sharpest annual decline in pending sales, with its index falling 13.5 percent to 109.7; this also marked a drop of 5 percent from November. The index of 97.5 in the Midwest was down 0.6 percent from the previous month and 7.2 percent from the previous year.