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The National Association of Realtors (NAR) Monday morning released its data on pending sales of existing homes for the month of May. The pending home sales index dipped a scant 0.5% from an April reading of 106.4 to a May reading of 105.9. The May index is down 2.2% compared with May 2017.

May sales declined in three of four NAR geographical regions.

The consensus estimate called for a month-over-month increase of 0.7% in pending sales. The index reflects signed contracts, not sales closings. An index reading of 100 equals the average level of contract signings during 2001.

The index has been above 100 (the “average” reading) for 43 straight months.

The NAR’s chief economist, Lawrence Yun, noted:

Pending home sales underperformed once again in May, declining for the second straight month and coming in at the second lowest level over the past year. Realtors® in most of the country continue to describe their markets as highly competitive and fast moving, but without enough new and existing inventory for sale, activity has essentially stalled.

Yun continued:

With the cost of buying a home getting more expensive, it’s clear the summer months will be a true test for the housing market. One encouraging sign has been the increase in new home construction to a 10-year high. Several would-be buyers this spring were kept out of the market because of supply and affordability constraints. The healthy economy and job market should keep many of them actively looking to buy, and any rise in inventory would certainly help them find a home.

By region, May pending home sales rose to an index score of 92.4 in the Northeast, down 4.8 points compared with May 2017. In the West, sales increased by 0.6 points to an index score of 94.7, down 4.1 points compared to last year’s index.

Sales rose 2.9 points in the Midwest to an index score of 101.4 and remain down 2.5 points year over year for the month. Sales in the South dropped 3.5 points to 122.9 in May and are unchanged compared with the year-ago index score.

Existing-home sales closed 2017 at around 5.51 million. The NAR’s Yun expects 2018 sales of around 5.49 million, down from a prior estimate of 5.54 million. The national median existing-home price is expected to rise by around 5% this year. In 2017 prices rose 5.7% and sales of existing homes increased by 1.1%. In 2016, sales of existing homes increased 3.8%, and prices rose 5.1%.