Tight inventory slows US pending home sales

More people are also moving out on their own after living with friends and relatives in the recession. That's driving a big gain in apartment construction and also pushing up rents.

Builders, meanwhile, started work on the most new homes in 4 ½ years in December. Last year was the best year for residential construction 2008, just after the recession started.

In December, the index of contracts signed fell in the Northeast, South and West. But it ticked up in the Midwest. The supply of homes costing less than $100,000 was particularly tight in the West, the Realtors said.