WASHINGTON — A measurement of pending home sales fell to its third-lowest reading on record in May as the housing market's recovery continued to prove elusive.

The National Association of Realtors' seasonally adjusted index of pending sales for existing homes fell 4.7 percent to 84.7 from an upwardly revised April reading of 88.9. The index was 14 percent below year-ago levels.

"The overall decline in contract signings suggests we are not out of the woods by any means," NAR Chief Economist Lawrence Yun said in a statement.

Home sales are considered pending when the seller has accepted an offer, but the deal has not yet closed. Typically there is a one- to two-month lag before a sale is completed.

Wall Street economists surveyed by Thomson/IFR had predicted the index would come in at 87. The index, which sunk to a record low of 83 in March, stood at 98.5 in May 2007. A reading of 100 is equal to the average level of sales activity in 2001, when the index started.

Sales of existing homes edged up in May, indicating that buyers were taking advantage of deeply discounted prices. But many economists believe prices must drop further before the housing industry can mount a sustained recovery.