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WASHINGTON, District of Columbia (AFP) – Pending home sales edged lower in June after hitting a six-year high in May, under pressure from rising mortgage rates, an industry group said Monday.

The National Association of Realtors (NAR) said its index for pending sales, reflecting sales contracts signed, slipped 0.4 percent to 110.9 in June from a downwardly revised 111.3 in May.

The decline was much smaller than the average analyst estimate of a 1.7 percent drop following the May spike to the highest pace since December 2006.

“Mortgage interest rates began to rise in May, taking some of the momentum out of contract activity in June,” Lawrence Yun, NAR chief economist, said in a statement.

“The persistent lack of inventory also is contributing to lower contract signings.”

Jim O’Sullivan, chief U.S. economist at High Frequency Economics, acknowledged the June dip could be seen as evidence of housing already being hurt by the rise in mortgage rates.

“But the drop paled in comparison with the surge in May, consistent with it being a pause and the trend remaining upward,” he said.

Despite the dip, pending home sales were 10.9 percent higher than in June 2012 as the housing market recovers from the collapse of a price bubble in 2006.

The NAR projected existing-home sales, the lion’s share of the U.S. market, would rise more than 8.0 percent and the median price would jump almost 11 percent in 2013.

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