NEW YORK (CNNMoney.com) -- The number of homes under contract to be sold fell more than expected in May after an unexpected spike the month before, a report showed Tuesday.
The Pending Home Sales Index from the National Association of Realtors (NAR) fell to 84.7 in May, down 4.7% from an upwardly revised reading of 88.9 in April. The index was 14% below the 98.5 it measured in May 2007.
The decline was steeper than the 2.8% fall that economists had expected, according to a consensus of estimates compiled by Briefing.com.
"The overall decline in contract signings suggests we are not out of the woods by any means," said Lawrence Yun, NAR chief economist, in a statement.
But Yun pointed out that some pullback was expected after April's surprise increase. The index jumped more than 7% in April as falling home prices sparked a bout of bargain hunting.
In the report, the NAR lowered its existing-home sales outlook for 2008, saying it now expects sales of 5.31 million, down from the 5.39 million forecast in April.
The NAR said existing home prices are also expected to fall. The aggregate median existing-home price is projected to fall 6.2% this year to $205,300, and then rise by 4.3% in 2009 to $214,100, the report indicated.
The outlook for new-home sales was also revised lower to 525,000 from the 529,000 prediction a month ago. And the median new-home price was expected to decline 3.2% to $239,300 this year.
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[Via Home Mortgage Rates and Real Estate News]
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