High prices and low supply are keeping potential home buyers at bay.
An index measuring signed contracts to buy existing homes was flat in September, according to the National Association of Realtors, but August's reading was revised down. That puts the index at its lowest level since January 2015. It is down 3.5 percent from a year ago.
Pending home sales have fallen on an annual basis now for five of the past six months, and Realtors say they do not expect much improvement unless the supply issue eases, which is unlikely.
"Demand exceeds supply in most markets, which is keeping price growth high and essentially eliminating any savings buyers would realize from the decline in mortgage rates from earlier this year," said Lawrence Yun, chief economist for the Realtors in a release. "While most of the country, except for the South, did see minor gains in contract signings last month, activity is falling further behind last year's pace because new listings aren't keeping up with what's being sold."