Pending home sales fell in May as the U.S. real estate market continues its downward spiral.

The latest reading from the National Association of Realtors, released Tuesday, fell within the range of economists' expectations. The pending home sales index, which tracks new contracts on existing homes, fell 4.6% in the month to a reading of 84.7, compared with the upwardly revised rate of 88.9 in April.

The index was down 14% from a year earlier.

While housing inventory remains high across the country, mortgage rates remain another drag. The average 30-year fixed-rate mortgage is forecast to rise to 6.5% this year and stay at that level through 2009, NAR said. The current 30-year mortgage is 6.3% today.

Homebuilder stocks barely reacted to the report, with

Pulte Homes

(PHM) - Get Report


Toll Brothers

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(LEN) - Get Report

all trading flat in morning activity. The

SPDR S&P Homebuilders

, an exchange-traded fun that tracks the sector, edged down 0.2% to $15.22.