U.S. pending home sales fell more than expected by 3.2% in July, according to the National Association of Realtors (NAR) on Tuesday. The decline follows a 5.8% rebound in the previous month, so taken together the index suggests a sideways moving trend.

The consensus was expecting a 1.5% decline in the month.

The index now stands at 86.5, down from the previous month's 89.0 reading.

Regionally, the results were mixed. The Northeast posted a 7.5% decline following a 3.4% gain in June, while the West saw a 10.6% decrease following a 4.6% increase.

The Midwest saw sales rise 2.8% while sales in the South came in flat.

The Pending Home Sales Index looks at home sales that have been signed but not finalized, a process that takes another month or two. The value of the index lies in its ability to forecast existing home sales, which represent eight-tenths of the market.

Prior to the release, Mike Englund, analyst at Action Economics, said: "We have already seen quite a bounce in the pending home sales data over the last three months, so even if we see some downside correction, as we assume, these figures are confirming a sideways trend."

By Patrick McGee and edited by Nancy Girgis
©CEP News Ltd. 2008