Tight inventory slows US pending home sales

Tight supply in the US housing market slowed potential sales in February, with the pending home sales index slipping from the previous month, the National Association of Realtors said Wednesday. The NAR pending home sales index -- which indicates the direction of actual sales -- fell to 104.8 last month from 105.2 in January. But the February reading was still the second highest level in nearly three years, and well up from the February 2012 level of 96.6, NAR said. NAR chief economist Lawrence Yun said the problem in the market now is limited supply, not demand. "Only new home construction can genuinely help relieve the inventory shortage, and housing starts need to rise at least 50 percent from current levels," he said in a statement. Yun said that builders continue to face tight credit conditions despite ultra-low interest rates.