U.S. pending home sales slump in May

A real estate report released on Tuesday showed that economists had been expecting a 2.8 percent decrease after a 7.1 percent surge in April, which previously had been reported as a 6.3 percent gain.

The National Association of Realtors is scheduled to release the figures at 10 a.m. in Washington. Estimates in the Bloomberg survey ranged from a drop of 6 percent to a gain of 0.2 percent.

Potential homeowners are cautious of purchasing homes as they expect further price declines and as higher mortgage rates while stricter lending standards make it harder to qualify for loans.

Slumping home construction will continue to hurt growth while falling property values undermine the consumer spending that makes up two thirds of the economy.

Pending home sales compared to a year ago, are down 14 percent. Pending sales are based on contracts signed in May and seen as a key barometer of future home sales activity.