Pending sales of existing U.S. homes in March fell more than expected to its lowest level in four years as the decline in subprime lending took its toll, data from a real estate trade group showed on Tuesday.
The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in March, fell 4.9% to 104.3 from an upwardly revised level of 109.7 in February.
Wall Street analysts were expecting the March index to come in at 109.0, according to economists polled by Reuters.
The index is the lowest since 103.5 in March 2003, the trade group said.
Ongoing turmoil in the mortgage finance sector contributed to the decline in pending sales, said the Realtors' chief economist David Lereah.
"We're starting to see the effects of a decline in subprime lending and tighter lending standards," Lereah said in a statement.
Increasing delinquencies among subprime borrowers with damaged credit has caused a contraction of mortgage financing in recent months.
U.S. Manufacturing Rebounds in April
Meanwhile, U.S. factory activity expanded more than expected in April and employment and prices paid rose, according to a survey published on Tuesday.
The Institute for Supply Management said its index of national factory activity rose to 54.7 in April, the highest since May 2006, from 50.9 in March, above economists' median forecast for 51.0. A reading above 50 indicates expansion in the sector.
The prices paid index, which measures inflationary pressures, rose to 73.0 in April, from 65.5 in March.
New orders, a gauge of future growth, rose to 58.5 in April from 51.6 while the employment index rose to 53.1 from 48.7.