The report followed a survey showing similar decreases in California in September.
The NAR's Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, showed the pending sales fell 4.6% in September from the previous month, but is still 6.4% higher than September 2010.
The data reflects contracts but not closings.
Lawrence Yun, NAR chief economist, said the housing market is being excessively constrained.
"A combination of weak consumer confidence and continuing tight lending criteria held back home buyers, even though the private sector added nearly 2 million net new jobs in the past 12 months," he said.
The PHSI in the Northeast declined 4.7%, but was 4.0% above a year ago. In the Midwest the index dropped 6.2%, but remained 12.3% higher than September 2010. Pending home sales in the South fell 5.5% in September, but were 5.0% above a year ago. In the West the index declined 2.1%, but was 5.6% higher than September 2010.
"America's monetary policy is contradictory and confusing, where some consumers with the best financial capacity and top-notch credit scores pay higher mortgage interest rates," Yun said. "The Federal Reserve evidently has been attempting to lower mortgage rates, yet more consumers are faced with taking out jumbo loans that carry higher interest rates."
Yun emphasized the need to reinstate higher loan limits in 42 states.
"Just leaving excessive cash to sit in banks and not work into the economy is a drag on the overall recovery," he said. "We need a comprehensive approach to address housing issues -- not additional impediments."