The number of homes under contract to be sold fell more than expected last month, according to the latest report by the National Association of Realtors.

The NAR Pending Home Sales Index fell 4.7 percent in May, well beyond the 2.8% drop expected by most economists. The current index is 14 percent below last year’s levels.

In the south, pending home sales decreased 7.1 percent, 22.1 percent below the number of sales in May 2007.

In the report, the NAR also said that it expects existing home prices to fall, with the aggregate median existing-home price projected to fall 6y.2% this year to $205,300.

The Association is still projecting a second-half of the year recovery in the housing market, although this view is not shared by many other real estate authorities.

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