Fewer homebuyers signed purchase contracts for resale homes in May, according to a report by the National Association of Realtors.

The association expected May’s drop in its Pending Home Sales Index following the April 30 contract deadline for the federal homebuyer tax credits. The deadline for eligible sales under contract by April 30 to close will be extended to Sept. 30 from its original deadline of June 30 if the president signs off on a bill passed by Congress on Wednesday.

The index decline follows three straight months of increases.

"Consumers are rational and they rushed to meet the tax credit eligibility deadline in April. The sharp decline in contract signings in May is a natural result with similar low levels of sales activity anticipated in June," said Lawrence Yun, the association’s chief economist, in a statement.

The association’s pending sales index fell 30 percent month-to-month and 15.9 percent year-over-year in May, to 77.6.

An index of 100 indicates the average contract activity in the index’s base year, 2001, which was a record year for existing-home sales.

The index is based on contracts signed but not yet closed — closings typically follow signings by one or two months, the report said. Because of the rush of signings these past few months, among other reasons, some closings have been held up.

The association attributed some stabilization in home prices to the tax credit.

"In most areas of the country there will be no sharp snap back in home prices in the upcoming years, although some local markets have experienced double-digit gains this year," Yun said.

"Without the tax credit, there will be more aggressive price negotiations between buyers and sellers," he added.

Regionally, the West saw the smallest declines in pending sales: the index fell 20.9 percent month-to-month and 15.1 percent year-over-year, to 85.3. In the South, the index fell 33.3 percent month-to-month and 14.4 percent year-over-year, to 82.5.

Meanwhile, pending sales in the Midwest declined 32.1 percent month-to-month and 20.2 percent year-over-year, to an index of 70.8. The Northeast had the lowest index, 67, a 31.6 percent month-to-month drop and 14.8 percent lower than the index for May 2009.

While some local markets — Yun noted Portland, Maine, and Jacksonville, Fla. — saw year-over-year increases in contract signings, the continued health of the housing market as a whole depends on job growth, he said.

"If jobs come back as expected, the pace of home sales should pick up later this year and reach a sustainable level of activity given very favorable affordability conditions," Yun said.

In its latest economic forecast, the association’s predictions for the unemployment rate remained largely the same: 9.8 percent for 2010 and 9.6 percent in 2011. The latter is a slight increase from June’s prediction of 9.5 percent.

The association’s home-sale forecasts were somewhat gloomier this month. Expectations for new single-family home sales were severely scaled back after sales reached a new low in May.

The association now expects new-home sales to rise 9.1 percent this year, down from its previous forecast, which predicted an 18.5 percent rise. In 2011, the association expects new-home sales to rise 39.3 percent, compared to an earlier forecast that anticipated a 26.8 percent rise.

The association predicts existing-home sales will rise 2.7 percent this year — that’s down from an earlier forecast, which predicted a 4.5 percent increase. And NAR exects sales of previously owned homes to rise another 5.3 percent in 2011.

The association expects a modest 0.8 percent increase in existing-home prices this year and a 3.2 percent increase next year — down from 1.2 percent and 3.4 percent, respectively, from its previous forecast.

Prices for new homes are expected to fall 2.6 percent this year, larger than the 0.5 percent that NAR anticipated in its earlier forecast. The latest forecast also calls for a 4.7 percent rise in the new-home price in 2011, down from its previous forecast for a 5.4 percent rise.

The association forecasts the 30-year fixed-rate mortgage rate to average 5.1 percent this year and 5.7 percent in 2011, and the association expects a 22.6 percent increase in housing starts this year and a 42.1 percent rise in 2011.

According to the latest figures on housing starts released by the U.S. Census Bureau and the Department of Housing and Urban Development, privately owned housing starts were at a seasonally adjusted annual rate of 593,000 in May, about 10 percent below the below the revised April estimate of 659,000, but an estimated 7.8 percent higher than the the May 2009 rate of 550,000.

A separate report released today by the Census Bureau and the U.S. Department of Commerce found that residential construction was valued at a seasonally adjusted annual rate of $260.8 billion in May, about 0.4 percent below the revised April estimate of $261.7 billion but 11.9 percent higher than the estimated value in May 2009.

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