US pending home sales slipped in August, an industry group said Monday in a report showing a slight cooling in the housing market, a key driver of economic growth.
Contract signings for previously owned homes fell 1.4 percent in August, but were up 6.1 percent from a year ago, the National Association of Realtors said.
"Pending sales have leveled off since mid-summer, with buyers being bounded by rising prices and few available and affordable properties within their budget," said Lawrence Yun, NAR chief economist.
It was only the second time this year that NAR's pending home sales index had fallen month-on-month, after a drop in June.
The August decline in pending sales surprised analysts, who had forecast they would rise by 0.5 percent for a second straight month, after sales of existing homes hit their highest pace since 2007 in August.
Pending home sales are a leading indicator, pointing to completed sales in the coming month or two.
A tight housing supply has been pushing up home prices, leaving many would-be buyers on the sidelines. Although job growth has continued at a steady clip, strengthening the finances of many consumers, the rise in prices notably has discouraged first-time buyers, a key driver of growth in the housing market.
NAR said it expected pending sales maintain their current pace but warned of looming threats, including the potential shutdown of the federal government in coming days amid a budget battle in Congress.
"The possibility of a government shutdown and any ongoing instability in the equity markets could cause some households to put off buying for the time being," Yun said.
Republican and Democratic lawmakers are fighting over funding government operations in the new 2016 fiscal year, beginning October 1.
With no legislative authorization to fund government yet in place, Congress faces the prospects of another crippling and politically disastrous shutdown like the one that shuttered federal buildings for 16 days in 2013.