Pending home sales declined overall in December, but for the second straight month the West experienced a slight increase.

The Pending Home Sales Index, a forward-looking indicator based on home contract signings, decreased 2.2 percent to 99 in December, down from 101.2 in November, according to the National Association of Realtors.

“The longer-term growth potential is high. The Federal Reserve announced a change in its stance on monetary policy,” said Yun. “Rather than four rate hikes, there will likely be only one increase or even none 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.”

Also, year-over-year contract signings fell 9.8 percent, making this the twelfth straight month of annual decreases.

“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 NAR.

The four major regions experienced a decline compared to one year ago, with the South sustaining the largest decrease. The partial government shutdown hasn’t caused any obvious damage to home sales.

“Seventy-five percent of Realtors reported that they haven’t yet felt the impact of the government closure,” said Yun. “However, if another government shutdown takes place, it will lead to fewer homes sold. Some home transactions were delayed, but we now expect those sales to go forward.”

The Pending Home Sales Index in the Northeast rose 2 percent to 93.2 in December, 2.5 percent below a year ago. In the Midwest, the index fell 0.6 percent to 97.5 in December, 7.2 percent lower than the same period a  year earlier.

Pending home sales in the South fell 5 percent to an index of 109.7 in December, which is 13.5 percent lower than a year ago. The index in the West increased 1.7 percent in December to 88.4 and fell 10.8 percent below a year ago.