Pending home sales fell 1.0% to an index reading of 104.7 in August, after a revised 3.2% gain to 105.8 in July, according to a report released Monday by the National Association of Realtors.
The July reading was first reported as a 3.3% increase to 105.9.
Economists polled by Thomson Reuters predicted that the index would be off 0.1%
An index of 100 is equal to the average level of contract activity during 2001.
Year-over-year the pending homes sales index is down 2.2% from last August, when the index was 107.1.
Regionally, pending sales were mostly lower. The Northeast saw a 3.0% drop to 86.5, while sales slid 2.1% in the Midwest to 102.4. In the South, sales fell 1.4% to 117.0, and sales gained 2.6% to 102.1 in the West.
"Fewer distressed homes at bargain prices and the acknowledgement we're entering a rising interest rate environment likely caused hesitation among investors last month," NAR Chief Economist Lawrence Yun said. "With investors pulling back, the market is shifting more towards traditional and first-time buyers who rely on mortgages to purchase a home."
Although loan conditions are tight and mortgage rates are expected to rise, Yun believes, first-time home buyers will gradually increase as employment and incomes rise. "Jobs and income gains will help repay student debt and better position first-time buyers, setting the stage for improved sales growth in upcoming years."
