An index of home purchase contracts fell 2.6% in June from May as the expiration of federal tax incentives for buyers continued to damp demand from home shoppers for a second straight month, according to the National Assn. of Realtors.
The trade group's pending home sales index, a forward-looking indicator based on contracts signed for previously owned homes, fell to 75.7 in June from an upwardly revised 77.7 in May, the group said Tuesday. The index stood at 93 in June 2009.
"If you're looking for a pulse in the U.S. housing market, best of luck. I can't seem to find one," Michael D. Larson, a housing and interest rate analyst at Weiss Research, wrote in a note to investors Tuesday. "What's remarkable about the weakness is that it's coming at a time where mortgage rates are hovering around 4.5%."
An index of 100 is equal to the average level of contract activity during 2001, which was both the first year that the group began tracking the data as well as the first of five straight years of increases for sales of previously owned homes.