US home sales 'decline in July'

The US government has moved to help the housing market

Pending sales of US homes declined more than expected in July, as the housing market continues to struggle, the main US estate agency trade body has said.

The National Association of Realtors' pending homes sales index fell 3.2% to 86.5 in July, down from 89.4 in June.

Analysts had only expected the figure - which measures accepted offers to buy homes - to fall to 88.6 in July.

The latest housing snapshot comes two days after the government said it would take over two key mortgage firms.

'Restoring confidence'

The government is bailing out Freddie Mac and Fannie Mae, which together underwrite nearly half of the outstanding mortgages in the US.

Freddie Mac and Fannie Mae do not directly lend to US homeowners, but play a vital role in the US mortgage market by buying home loans from approved lenders and then selling them on to investors.

The US government hopes its intervention will help restore both confidence and help increase available funds in the mortgage market, thereby boosting home sales and helping to halt falling prices.

The levels of pending US home sales are now 6.8% lower than at the same time last year, added the National Association of Realtors.