Pending sales of previously owned homes fell by 12.2 percent in July as credit tightened amid troubles in the housing and subprime mortgage sectors, Reuters reported this morning.

The National Association of Realtors’ Pending Home Sales Index, based on contracts signed in July, fell to 89.9, the lowest level since September 2001 when the index stood at 89.8.

The fall was much bigger than the 2 percent decline in the index economists were expecting for July and helped paint a bleaker picture of the housing market’s future.

“It’s difficult to fully account for mortgage disruptions in the index, and our members are telling us some sales contracts aren’t closing because mortgage commitments have been falling through at the last moment,” NAR economist Lawrence Yun said. But he added that though some concerns remain, since mid-August the market appears to be stabilizing.

This index offers a good look into home sales moving forward because these pending sales contracts are usually finalized within one or two months. Compared with a year ago, the index was 16.1 percent lower.