WASHINGTON (Feb 27): Contracts to buy previously owned US homes dropped in January on a shortage of inventory in the Midwest and West regions, the National Association of Realtors said on Monday.

The NAR said its pending home sales index, based on contracts signed last month, fell 2.8% to 106.4. The pending home sales index for December was revised up to 109.5.

Analysts polled by Reuters had forecast a 0.9% increase in January. The index last month, however, was still 0.4% higher than in January 2016.

Buyers are easily outnumbering sellers in several metro areas, NAR chief economist Lawrence Yun said in a statement.

"Most notably in the West, it's not uncommon to see a home come off the market within a month," Yun said.

Across the nation's four regions, contracts in January increased 2.3% in the North and edged up 0.4% in the South. That contrasted with declines of 9.8% in the West and 5.0% in the Midwest.

The NAR reported last week that US existing home sales hit a 10-year high in January as buyers shrugged off higher prices and mortgage rates.