WASHINGTON Contracts to buy previously owned U.S. homes unexpectedly fell in June as fewer properties came on the market, an industry group said on Thursday, pointing to weak home resales in July.
The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in June, slipped 1.4 percent to 99.3. May's reading was revised down to show a 5.4 percent increase from a previously reported 5.9 percent.
Economists polled by Reuters had expected signed contracts, which become sales after a month or two, to rise 0.2 percent.
"Buyer interest remains strong but fewer home listings mean fewer contract signing opportunities," said NAR chief economist Lawrence Yun.
"We've been seeing a steady decline in the level of housing inventory, which is most pronounced in the lower price ranges popular with first-time buyers and investors."
Pending home sales were up 9.5 percent in the 12 months to June. Home resales fell sharply in June.
Contracts in the Northeast fell 7.6 percent in June and slipped 0.4 percent in the Midwest. In the South, contracts declined 2.0 percent.
The West saw a 2.6 percent increase in contracts in June.