WASHINGTON (Reuters) - Contracts to buy previously owned homes declined more than expected in August and have now fallen on an annual basis for eight consecutive months, the latest indication that the housing market is struggling to regain momentum.
The National Association of Realtors said on Thursday its Pending Home Sales Index, based on contracts signed last month, declined 1.8 percent to a reading of 104.2 amid an inventory shortage and a rise in prices that has sidelined many buyers.
Economists polled by Reuters had forecast pending home sales falling 0.4 percent in August. It was the fourth decline in the last five months.
Pending home contracts become sales after a month or two and are therefore seen as a good indicator of future existing home sales. Data last week showed that existing home sales, like the broader housing market, have ebbed despite overall strength in the U.S. economy.
"With prices having risen so quickly, many consumers were deciding to wait to list their homes hoping to see additional price and equity gains," Lawrence Yun, NAR's chief economist, said in a statement.
In August, contracts dropped 5.9 percent in the West and were down 1.3 percent in the Northeast. They dipped 0.5 percent in the Midwest and 0.7 percent in the South.