Fewer Americans signed contracts to buy homes in August -- the third straight month of decline for the housing market.
Officials say it could be higher mortgage rates deterring buyers from taking the plunge into home-ownership. Mortgage rates have risen more than a full percentage point since May, when the Federal Reserve first signaled it might slow its monthly bond purchases.
The National Association of Realtors says its seasonally adjusted index for pending home sales declined 1.6 percent to 107.7 last month.
The index has fallen for three straight months, after reaching a six-year high in May.
However, average rates on fixed mortgages fell this week to their lowest point in two months.
The decline follows the Federal Reserve's decision last week to hold off slowing its bond buys.
Mortgage buyer Freddie Mac says the average rate on the 30-year loan dropped to 4.3 percent -- the lowest average since July 25.