the number of houses going under contract in the us dropped in may amid sluggish signings for pending contracts here are the main takeaways from the national association of realtors report released thursday the pending home sales index a leading indicator of home sales based on contract signings declined 27 to 765 in may an index of 100 is equal to the level of contract activity in 2001 economists polled by the wall street journal expected the index to fall by 03 pending home sales declined by 222 in may compared with the same month a year earlier the lack of housing inventory continues to prevent housing demand from being fully realized according to lawrence yun nars chief economist it is encouraging that homebuilders have ramped up production but the supply from new construction takes time and remains insufficient yun said there should be more focus on boosting existinghome inventory with temporary tax incentive measures pending home sales decreased in three of the four major us regions in may from april transactions fell by 61 in the west 53 in the midwest and 44 in the south but rose by 129 in the northeast