Pending sales of existing U.S. homes dropped far more than expected in April to touch a seven-month low, a trade group said on Friday, dealing a blow to hopes of a recovery in the housing market.

The National Association of Realtors Pending Home Sales Index dropped 11.6 percent to 81.9 in April, the lowest since September. Pending home sales lead existing home sales by a month or two.

Economists, who had expected pending home sales to fall 1.0 percent last month, said bad weather in some parts of the country might have affected home shopping.

There may some temporary factors like bad weather in the South, said Gus Faucher, director of macroeconomics at Moody's Analytics in West Chester, Pennsylvania.

Higher gasoline may be making potential home buyers a bit cautious. It is signaling further weakness in housing, but we do expect housing to turn around later this year. It just hasn't happened yet.

Pending home sales in the South, which was ravaged by tornadoes, dropped 17.2 percent. Sales were also down in the Midwest and the West.

The weak housing market is one the headwinds facing the economy as it make a slow recovery from the worst recession since the 1930s. The economy grew at a 1.8 percent annual rate in the first quarter after expanding at a 3.1 pace in the last three months of 2010.

(Reporting by Lucia Mutikani, Editing by Chizu Nomiyama)