Fewer Americans signed contracts to buy previously owned homes in March for the second consecutive month as falling prices and tougher loan rules discouraged buyers.

The index of pending home resales fell 1 percent to 83, following a 2.8 percent drop in February that was larger than previously reported, the National Association of Realtors said Wednesday in Washington. The decline matched the median forecast of economists surveyed by Bloomberg News.

The glut of unsold properties is driving down home values, while rising defaults on subprime mortgages have prompted lenders to restrict access to credit, representing more hurdles for buyers. The slump in residential real estate may persist for much of the year, hurting economic growth.

"Sales are continuing to fall and I think it's largely because buyers are expecting prices to continue to fall," Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York, said in a Bloomberg Television interview. Sales will "continue to fall probably though mid-summer." Lehman correctly forecast the decline.

Economists projected pending sales to fall 1 percent after an originally reported decline of 1.9 percent the prior month, according to the median of 30 forecasts in a Bloomberg News survey of economists. Estimates ranged from a drop of 4 percent to an increase of 1 percent.

Earlier Wednesday, a report from the Labor Department showed U.S. worker productivity in the first

quarter unexpectedly accelerated as companies cut payrolls and hours worked to reduce costs during the weakest pace of economic growth in seven years. Productivity, a measure of efficiency, rose at a 2.2 percent annual rate, and labor costs climbed at a 2.2 percent pace.

U.S. stock prices remained lower following the reports and yields on Treasury securities were little changed. The Standard & Poors' 500 Index was down 0.3 percent at 1,414.3 at 10:05 a.m. in New York.

Pending resales decreased 20 percent from March 2007, Wednesday's report showed.

The Realtors' data on pending sales go back to January 2001, and the group started publishing the index in March of 2005.

The pending resales index is considered a leading indicator because it tracks contract signings. The existing-home sales report reflects closings, which typically occur a month or two later.

Pending resales decreased in three of four regions. They dropped 10.4 percent in the Midwest, 1.4 percent in the West and 0.1 percent in the South. Pending resales jumped 12.5 percent in the Northeast.

The pending-sales index is based on a sample of 20 percent of transactions in the multiple listing service used by real estate agents, while the existing-home sales report covers about 40 percent.

Harvard University economist Martin Feldstein said yesterday the economy is "sliding into a recession," and cited a sharper downturn in housing as the biggest risk. Feldstein is also president of the National Bureau of Economic Research, the group that charts when recession begin and end.

"Everything hinges on what's going to happen to house prices," and "therefore the whole credit crunch," Feldstein said in a Bloomberg Television interview. Home prices will "come down somewhat more."

Buyers are probably being put off by falling prices. Home values fell 7.7 percent in the first quarter to the lowest level in almost three years, according to Zillow.com, an online real estate data provider. Zillow also estimates that almost 52 percent of owners who bought homes in 2006 now owe more on their property than it is worth.

Access to credit is also shrinking. The share of banks making it tougher for companies and consumers to borrow approached a record in the past three months, according to the Federal Reserve's quarterly survey of senior loan officers issued this week.

Federal Reserve Chairman Ben S. Bernanke in a speech this week urged the government and mortgage lenders to intensify efforts to avoid foreclosures.

D.R. Horton Inc. yesterday reported a record loss as orders slumped and it was forced to write down $834.1 million of land and inventory. The company cut its quarterly dividend by half.

"Conditions in the homebuilding industry remain challenging," Chairman Donald Horton said in a statement.

The fallout from the housing downturn is spreading. The world's biggest banks and securities firms cut a combined 65,000 jobs in the past 10 months as mortgage losses and writedowns for financial institutions reached $319 billion, according to Bloomberg calculations.