The report by the National Association of Realtors was another sign that the nation's housing problems are not abating.

The Realtors' Pending Home Sales Index fell to 84.7 in May, down 4.7% from an upwardly revised reading of 88.9 in April. The index was 14% below its level in May 2007.

The recent decline was steeper than the 2.8% fall that economists had forecast, 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.

Yun said that some pullback had been expected after April's surprise increase. The index jumped more than 7% in April as falling home prices sparked a bout of bargain shopping.

"The housing market had a nice bounce in April - too bad it doesn't appear to have carried through into May and June," said Mike Larson, real estate analyst at Weiss Research.

Larson says the May decline was caused by falling consumer confidence, rising unemployment, tight credit conditions and high energy and food costs straining household budgets.

"Unless and until the economic clouds part, we'll likely see the housing market continue to struggle," Larson said.

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.

Source: Cnn.com

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