US pending home sales declined for the fourth consecutive month in September, as higher mortgage interest rates and higher home prices curbed buying power, according to the National Association of Realtors.
The NAR's Pending Home Sales Index fell 5.6% to 101.6 in September from a downwardly revised 107.6 in August, and is 1.2% below September 2012 when it was 102.8.
The index is at the lowest level since December 2012 when it was 101.3; the data reflect contracts but not closings.
Mortgage rates have risen sharply since May on bets that the U.S. Federal Reserve would soon begin winding down a stimulus program, although rates have eased slightly in recent weeks.
Many investors believe the Fed will keep its bond buying stimulus at full throttle given recent signs the U.S. economy lost a step in September.
The number of newly signed contracts to buy homes was at its lowest level last month since December. It was the largest one-month drop since May 2010, when a home-buying tax credit was expiring, an NAR spokesman said. Contracts fell across all four major regions tracked by the realtors' group.
The U.S. housing market, which was battered by the 2007-09 recession, had appeared to turn a corner early last year when home prices began to rise again.