The National Association of Realtors' index for pending sales of existing homes decreased at a seasonally adjusted annual rate of 12.2% to 89.9 in July from June's 102.4, the industry group said Wednesday.

The NAR index, based on signed contracts for previously owned homes, was 16.1% below the level of July 2006.

In a news release, the NAR said the index shows existing-home sales are likely to decline in coming months as mortgage disruptions work through the housing market.

"It's difficult to fully account for mortgage disruptions in the index, and our members are telling us some sales contracts aren't closing because mortgage commitments have been falling through at the last moment," NAR senior economist Lawrence Yun said.

"These temporary problems are primarily with jumbo loans, and there are continuing issues for subprime borrowers, but there are no serious problems for the majority of buyers who qualify for conventional financing or FHA-insured loans," Mr. Yun said. "Some consumer concerns remain, but since mid-August the market has been stabilizing somewhat.

"If lenders focus on the essentials of creditworthiness and adjusted valuations based on comparable sales, and ignore speculation on what might happen in the future, broader stabilization will come sooner rather than later," Mr. Yun said.

The NAR's pending home sales index was designed to try measuring which way the housing market is going in the future. It is based on pending sales of existing homes, including single-family homes and condominiums. A home sale is pending when the contract has been signed but the transaction hasn't closed. Pending sales typically close within one or two months of signing.

By region, the Northeast decreased 12.2% in July from June; it fell 10.0% from a year earlier. The Midwest decreased 13.1% in July from June; it fell 15.8% from last year. The South dropped 6.6% in July from June; it tumbled 15.2% since July 2006. The West decreased 20.8% in July from June; it fell 21.8% from a year earlier.