The pending home sales index fell 2.5% in August from a two-year peak in July, possibly a reflection of low inventories of less-expensive homes, the National Association of Realtors said Thursday.
The NAR said the housing market can be expected to show some volatility as it recovers from its steep slide.
"The performance in month-to-month contract signings has been uneven," said NAR Chief Economist Lawrence Yun, "with ongoing shortages of lower-priced inventory in much of the country.
Activity is at a notably higher level than last year, however. Pending sales of homes in August were up 10.7% from a year earlier.
The pending home sales index tracks contract signings for existing homes. It gives an indication of what actual existing-home closings will be in the next month or two.
Homebuilders generally rose Thursday following stock sell-offs in recent days.
Falling 2% was Nationstar Mortgage Holdings (NSM), a highflying mortgage loan servicer. Tuesday, Nationstar priced a $100 million senior notes offering.
The share price hikes were a turnabout from Wednesday, when homebuilders fell after a Census Bureau report said new-home sales slipped 0.3% in August.
An Urban Land Institute survey of 39 leading economists and analysts, out Wednesday, found economists are more optimistic than six months ago about the housing market. Single-family starts, which have been near record lows over the past three years, are projected to reach 530,000 in 2012, 30,000 more than was expected in a March survey.
Starts are then expected to rise to 675,000 in 2013 and 800,000 in 2014.
"The forecast suggests that a housing recovery is under way as consumers sense a tipping point and, drawn by low mortgage rates, return to the market," the institute said.
The national average home price is expected to rise by 3.2% this year, 3.9% in 2013 and 5% in 2014, it said.
Economists in the Urban Land Institute survey predicted U.S. GDP will rise 2% this year and in 2013, then accelerate to 2.9% in 2014.
Predictions for commercial real estate activity were scaled back by as much as 20% from ULI's March survey.
Total value of transactions this year is seen slipping to $223 billion from $227 billion in 2011, before rising to $250 billion in 2013 and $275 billion in 2014.