Pending home sales, the forward-looking indicator of existing home sales reported by the National Association of Realtors, declined for the second consecutive month to a new record low.

The NAR's Pending Home Sales Index (PHSI), released Tuesday morning, declined 2.6% to 75.7 based on contracts signed in June from an upwardly revised level of 77.7 in May, which was the previous record low for the index, which was established in 2001. It was 18.6% below its level of June 2009 when it was 93.0.

Analysts were expecting a decline of 1.5%.

"There could be a couple of additional months of slow home-sales activity before picking up later in the year, provided the job market continues to improve," said Lawrence Yun, the NAR's chief economist. "Over the short term, inventory will look high relative to home sales. However, since home prices have come down to fundamentally justifiable levels, there isn¹t likely to be any meaningful change to national home values."

The PHSI in the Northeast dropped 12.2% to 58.8 in June, 25.4% lower than June 2009. In the Midwest, the index fell 9.5% to 64.1, 27.8% lower than a year ago. The South rose 3.7% to an index of 85.8, 13.3% below June 2009. The West slipped 0.2% to 85.1, 14.2% below last June.

Wells Fargo home building analyst Carl Reichardt wrote in an investor note, "Once again, the hangover post-expiration of the Federal homebuyer tax credit significantly impacts this data, and clouds the "true" demand picture for resales. The surprise drop on an easy sequential comparison (-30.0% as revised) also indicates greater tax credit pull-forward and more hesitancy on the part of buyers, possibly as they wait to see if prices fall further with the tax credit gone, or await the potential for additional stimulus which they may be conditioned to expect."