WASHINGTON (Reuters) - Contracts to buy previously owned U.S. homes unexpectedly fell in June after five straight months of increase, suggesting some cooling in sales activity after recent hefty gains.
The National Association of Realtors said on Wednesday its Pending Home Sales Index, based on contracts signed last month, declined 1.8 percent to 110.3. Still, the index was the third highest reading for this year.
Pending home contracts become sales after a month or two, and last month's drop pointed to a pause in home resales after they reached a near 9-year high in May. Economists had forecast pending home sales rising 1.0 percent last month.
The decline in contracts comes on the heels of a drop in new home sales. Still, that will probably not change views the housing market recovery was back on track given a tightening labor market. Other housing market indicators such as groundbreaking on new projects, building permits and builder confidence have painted a bullish picture for housing.
Pending home sales rose 8.2 percent from a year ago.
Contracts edged up 0.4 percent in the Northeast and gained 0.5 percent in the West. They declined 3.0 percent in both the South and the Midwest.