The pending home sales in the United States unexpectedly declined in June after reporting a significant surge in May.
The trends were shown in the report released by the National Association of Realtors (NAR)on Monday.
According to the NAR reports, the pending home sales index fell by 1.1 percent to 102.7 in June. It was up by 6 percent to 103.8 in May.
According to NAR, despite the unexpected decline in the pending home sales, the index remained above 100. This level is considered as an average level for any contract activity.
“Activity is notably higher than earlier this year as prices have moderated and inventory levels have improved,” said NAR chief economist Lawrence Yun.
“But supply shortages still exist in parts of the country, wages are flat and tight credit conditions are deterring a higher number of potential buyers from fully taking advantage of lower interest rates,” Yun said.
The insiders say the development came as a surprise for the economists who were expecting the pending home sales to surge by another 0.5 percent.
A pending home sale complies a contract that has been signed but not yet closed. Generally, four to six weeks are required to close a contracted sale.
According to Yun, existing homes sales are likely to drop by 2.8 percent to 4.95 million in 2014 and from 5.1 million in previous year.
The experts believe the national median existing home price may grow from five to six percent in 2014 and next year.