Contracts to buy previously owned U.S. 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 percent 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 percent increase in January. The index last month, however, was still 0.4 percent 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 percent in the North and edged up 0.4 percent in the South. That contrasted with declines of 9.8 percent in the West and 5.0 percent in the Midwest.

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