Pending home sales declined in August

Pending home sales, a leading housing market indicator, fell in August:

A gauge of future home sales fell in August to the lowest level in four months, underscoring the challenges facing the hobbled housing industry.

The National Association of Realtors’ seasonally adjusted index for pending sales of existing homes decreased 1.2% on a monthly basis to 88.6, the industry trade group said Thursday.

The decrease is the second in a row, following a 1.3% drop to 89.7 in July, and it dragged the index to the lowest point since April. For the month of August, pending sales fell in three of four regions: Only the South saw a gain.

The index tracks agreements to purchase homes, making it a good indicator of what’s to come in the market. A sale is considered pending when the contract has been signed but the transaction hasn’t closed; Pending sales typically close within a month or two. (A score of 100 equals the average activity level in 2001.)