Pending U.S. home sales fell more than expected in July as the housing market's struggles continued, an industry group said Tuesday.
The National Association of Realtors said its seasonally adjusted index of pending sales for existing homes fell 3.2 percent to a reading of 86.5 from an upwardly revised June reading of 89.4. The index was 6.8 percent below year-ago levels.
Home sales are considered pending when the seller has accepted an offer, but the deal has not yet closed. Typically there is a one-to two-month lag before a sale is completed.
Wall Street economists surveyed by Thomson/IFR had predicted the index would fall to 88.6. The index, which sunk to a record low of 83 in March, stood at 92.2 in July 2007.
Lawrence Yun, the trade group's chief economist, forecasts U.S. home sales are on a pace to fall 11 percent from last year to just over 5 million in 2008. Yun also says that stringent lending criteria by Fannie Mae and Freddie Mac — the mortgage finance companies taken over by the government this weekend held back sales activity.
Many in the real estate industry are hopeful that these standards will be relaxed with Fannie and Freddie under government control, but the outlook remains uncertain.