WASHINGTON – Pending sales of existing U.S. homes in May unexpectedly fell to their lowest level in more than 5-1/2 years, data from a real estate trade group showed Tuesday in a sign of continued weakness in the housing sector.
The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in May, fell 3.5 percent to 97.7 from a downwardly revised level of 101.2 in April. The May index is the lowest since 89.8 in September 2001.
Wall Street analysts polled ahead of the report were expecting the May index to rise 0.2 percent.
U.S. government bond prices briefly trimmed losses after the weaker-than-expected housing data.
"I do not see a bottoming of the housing market. There is not a light at the end of the tunnel," said Kevin Flanagan, fixed-income strategist for global wealth management at Morgan Stanley in Purchase, New York.
Tuesday's data comes amid other signs of a soft housing market with home resales and sales of new homes both slipping in May.
The Realtors' chief economist said Tuesday that new, tighter standards on mortgage lending and a lack of buyer confidence were putting a crimp in demand.
"Home sales should stay close to present levels in the months ahead," said Lawrence Yun.
A sale is listed as pending when the contract has been signed but the transaction has not been closed.