A key leading indicator of the health of the housing market unexpectedly slipped in November.

Pending Home Sales Index, the number of homes that are under contract to be sold, fell 2.6% to 125.7 last month from October — the third straight month of declines — according to the National Association of Realtors (NAR). Analysts surveyed by Bloomberg were expecting pending home sales to be flat from October. Despite the monthly dip, pending home sales are up 16.4% from the same month a year ago. And contract signings are up across all regions in the U.S. from a year ago.

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

The housing market has been a bright spot in the economy amid the COVID-19 pandemic. Historically low interest rates, pent-up demand from COVID-19 lockdowns and low inventory has put upward pressure on home prices. According to the NAR, median existing home price rose 14.6% to $310,800 in November from the same time a year ago, close to nine straight years of monthly annual increases. On Tuesday, S&P CoreLogic Case-Shiller national home price index posted a 8.4% annual gain in October, up from 7% in September, marking the fastest growth rate since March 2014.

Total housing inventory at the end of November was 1.28 million units, down 9.9% from October and down 22% from one year ago, according to NAR. Unsold inventory sits at an all-time low of 2.3-month supply at the current sales pace, down from 2.5 months in October and down from the 3.7-month figure recorded in November 2019.

“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 said.

The results follow existing and new home sales data that also fell in November. Existing home sales fell 2.5% to a seasonally adjusted annual rate of 6.69 million units last month and new home sales plummeted 11% to a seasonally adjusted annual rate of 841,000 units last month. Experts attributed the declines to low inventory, increased construction costs and lack of skilled labor.

Amanda Fung is an editor at Yahoo Finance.

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