WASHINGTON (AP) — Americans signed fewer contracts to buy previously occupied homes last month, the latest sign the housing market recovery is uneven.
The National Association of Realtors said Thursday that its index of sales agreements fell 1.4 percent last month to 99.3. May's reading was revised down to 100.7.
A reading of 100 is considered healthy. The index is 9.5 percent higher than it was a year ago. The index bottomed at 75.88 in June 2010 after a homebuyers' tax credit expired.
Contract signings typically indicate where the housing market is headed. There's generally a one- to two-month lag between a signed contract and a completed deal.
Joshua Shapiro, chief U.S. economist at MFR Inc., noted that even with last month's drop, the index has risen since January and is higher than it was in April. That could translate into higher sales of previously occupied homes in July.
Most economists say the housing market is recovering, but at a slow and uneven pace.
Builders are more confident and breaking ground on more homes. Construction of new single-family homes rose to a two-year high last month. Mortgage rates are at record lows. And home prices nationwide have stabilized after losing a third of their value in the past six years.
Sales of both new and previously occupied homes fell in June, but remain higher than they were a year ago.
One trend that is holding back sales has been low inventories. There were 144,000 new homes for sale in June, just above May's 143,000 — the lowest on records dating back to 1963.
And the inventory of previously occupied homes also fell last month, to 2.39 million. That's a drop of more than 24 percent from last year, the Realtors' group said last week.
It would take about six and a half months to exhaust the supply at the current sales pace. That's close to the six months' supply that economists consider healthy.