The index of pending home sales declined 1.1 % in June after rising 6% in May, figures from the National Association of Realtors showed.
The median forecast of 39 economists surveyed by Bloomberg News projected sales would rise 0.5%.
Limited availability of credit and sluggish wage growth are making it harder for prospective buyers to take the plunge, threatening to throttle the pace of the housing recovery. Continued gains in employment and a bigger supply of available homes will be needed to help accelerate the industry’s progress, which Federal Reserve Chair Janet Yellen has said is lackluster.
“Unfortunately, I don’t see much of an acceleration in housing demand going forward until we get a significant improvement in the labor market and the income part of it in particular,” said Yelena Shulyatyeva, a U.S. economist at BNP Paribas.
Estimates in the Bloomberg survey of economists ranged from a decline of 3.1% to an increase of 3.5%. The May reading was revised from a previously reported 6.1% gain.
Purchases were down 4.5% from the year prior, on an unadjusted basis, after a 6.9% decrease in the 12 months that ended in May, the association reported.
Two of four regions showed a decrease in contract signings from a month earlier, led by a 2.9 % drop in the Northeast. Contract signings fell 2.4 % in the South, rose 0.2 % in the West and climbed 1.1 % in the Midwest.