An index that forecasts near-term home sales in the United States fell to a record low in August as potential homebuyers found it harder to get mortgages. The National Association of Realtors said Tuesday its seasonally adjusted index of pending sales for existing homes fell 6.5 percent from July and 21.5 percent from a year ago. August's reading of 85.5 was below analysts' expectations and the lowest since the index began its measurements in January 2001. Analysts surveyed by Briefing.com had predicted the index would fall by 2 percent from July. The pending home sales index is designed to predict sales levels over the following two months. An index reading of 100 is equal to the average level of sales activity in 2001. The dip in predicted sales levels come amid continuing crisis in the housing market and an increased reluctance among lenders to loan money to would-be homeowners. The problems, experts say, were seen especially in expensive areas where borrowers need to take out “jumbo” home loans above $417,000 that can't be sold to government-sponsored mortgage companies Fannie Mae and Freddie Mac In late August, the gap in mortgage rates between jumbo loans and “conforming” loans below the $417,000 limit widened to 0.93 percentage points, up from a typical level of 0.2 percentage points, according to financial publisher HSH Associates. That difference makes it harder for prospective buyers, particularly those in the more expensive Northeast and West Coast markets to afford homes. As of last week, the gap had narrowed to a difference of 0.76 percentage points, with 30-year fixed rate jumbo home loans nationwide averaging 7.22 percent and conforming loans averaging 6.46 percent, according to HSH's weekly survey. In some areas, up to 30 percent of signed contracts fell through in August, the Associated Press reported. Last week new figures showed sales of existing single-family homes dropped by 4.3 percent in August to the lowest point in five years. Sales dropped to 5.5 million units that month, the slowest pace since August 2002.
