Looking to buy a home? You probably didn't have a lot of competition last January. The number of people who signed contracts to buy homes shrank as cold weather and a slack economy kept many potential buyers home, according to the Pending Homes Sales Index, created by the National Association of Realtors.

The Pending Home Sales Index fell 7.6 percent to 90.4, from an upwardly revised 97.8 in December. Analysts had expected a slight rise. January was the third month in a row that the index has been flat or falling.

That means fewer people bidding up home prices -- bad news if you're selling, but good news if you're in the market to buy.
Economists expect the weak market to pick up in the spring as the federal homebuyer tax credit expires again. "We will see weak near-term sales followed by a likely surge of existing-home sales in April, May and June," says Lawrence Yun, NAR chief economist.

However Yun has been disappointed before. "January pending sales, though still higher than one year ago, remain much lower than expected given that a large number of potential buyers are eligible for the expanded home buyer tax credit," he says.

Yun blames January's low volume of pending home sales on the "abnormally severe and prolonged winter weather."

The Pending Homes Sales Index measures the volume of contracts signed to purchase homes. It's usually a good indicator of how many homes will be sold in the coming months, since homebuyers who break contracts to buy home risk losing their deposits. More than 80 percent of pending home sales close within two months.

An index level of 100 is equal to the average level of contract in 2001, the first year recorded by the index.