Pending home sales in the US fell to their lowest level this year in July, underscoring how persistently high mortgage rates and steep home prices continue to weigh on the housing market.

The National Association of Realtors (NAR) reported on Tuesday that its pending home sales index declined 2.3% to 71.2, the weakest reading since January and matching the second-lowest level on record dating back to 2001. Economists surveyed by Bloomberg had projected no change on the month.

"The combination of this summer's highest mortgage rates and record-high home prices has reduced the number of signed contracts," said Lawrence Yun, NAR's chief economist, in a statement. "Homes are now sitting on the market longer, and fewer buyers are bidding above the asking price than a year ago, though there remains wide variation across regional markets."

At present, the average rate on a 30-year fixed mortgage sits just below the one-year high touched in late July, a dynamic that continues to discourage many would-be sellers from listing their properties while simultaneously pushing homeownership further out of reach for a broad swath of buyers.

The pending home sales index serves as a leading indicator for closed existing-home sales, as homes typically remain under contract for one to two months before transactions are finalized.