Pending home sales in the U.S. fell in December after hitting the highest level in a year in November. The National Association of Realtors said pending home sales fell 3.5% in December to 96.6 on their index. November’s index reading was 100.1. Even with the drop, December sill had the second highest reading since April 2010. A reading of a 100 is considered healthy for the housing market.

Pending home sales gives some insights into where the housing market is potentially headed. There is usually about a month or two wait time between a signed contract and a completed deal. Lately though, pending home sales have not always meant a completed deal as many buyers have cancelled their contract at the last minute.

While pending sales saw a decline last month, analysts have welcomed the recent trend as the housing market tries to right itself.

Home prices are the cheapest they’ve been in decades with long-term mortgage rates at historic lows. Home prices in cities have fallen steadily since 2006.

There are many factors as to why Americans aren’t buying houses right now. The main ones are high unemployment and weak job growth. Plus, loans are still hard to come by unless you have a well paying job and great credit. Even those with the ability to get a loan are waiting as they think home prices will move even lower.