Despite the modest slide, the National Association of Realtors’ pending home sale index hit an all-time high for the month of November, it was announced Wednesday.

The very real inventory crunch hitting the housing market caused a modest month-over-month dip in the pending home sales index, data released Wednesday by the National Association of Realtors shows.

NAR’s pending home sale index fell 2.6 percent, to 125.7, from October to November, the third consecutive month of month-over-month declines. An index of 100 is equal to the level of contract activity in 2001, when NAR began tracking contract signings.

Despite the month-over-month declines, the index remained 16.4 percent higher than November 2019 — and the highest November on record.

“The latest monthly decline is largely due to the shortage of inventory and fast-rising home prices,” NAR Chief Economist Lawrence Yun said in a statement. “It is important to keep in mind that the current sales and prices are far stronger than a year ago.”

“The market is incredibly swift this winter with the listed homes going under contract on average at less than a month due to a backlog of buyers wanting to take advantage of record-low mortgage rates,” Yun added.

Regionally, the index fell on a monthly basis between 1.1 percent and 4.7 percent in all four regions tracked by the National Association of Realtors. At 4.7 percent, the West region saw the biggest decline.

On an annual basis, however, the index was up in every region between 10.4 percent and 21.3 percent, with the South experiencing the biggest increase.

Despite three consecutive months of declines, Yun maintains a positive outlook for the upcoming year, predicting a slight upward rise in mortgage rates and a 10 percent increase in existing-home sales and a 20 percent increase in new home sales.

“Economic growth is guaranteed from the stimulus package and from vaccine distribution, but high government borrowing will put modest upward pressure on interest rates,” Yun said.

Email Patrick Kearns

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