Ed Reinke, Associated Press
Realtor Catherine Schramm replaces a listing line number atop a sign at a home in Florence, Ky., Tuesday. A measurement of pending home sales fell to its third-lowest reading on record in May.

WASHINGTON — Signs are emerging that the U.S. housing market's long slump is likely to fester through the summer, and the real-estate market may not recover for at least another year.

The latest report, the National Association of Realtors' pending home sales index, slipped by 4.7 percent in May to the third-lowest reading on record. The decline "suggests we are not out of the woods by any means," said the trade group's chief economist Lawrence Yun.

The bad news came as the regulator for Fannie Mae and Freddie Mac tried to reassure investors that an accounting-rule change wouldn't force the government-chartered mortgage finance companies to raise tens of billions in capital to offset losses.

With more negative data about the housing market continuing to emerge as the economy weakens and job losses accelerate, economists are reluctant to say the worst is over.

"Even if housing market activity does manage to bottom out later this year, it is likely that any recovery would be exceedingly slow," Jeffrey Lacker, president of the Federal Reserve Bank of Richmond said in a speech in Washington.

While home sales are likely to fall to their lowest point late this year or early next year, any recovery is likely to be weak through at least 2010, said Mark Vitner, senior economist with Wachovia Corp.

Meanwhile, prices shouldn't hit bottom for another year at the earliest, Vitner said, since the housing market is glutted with unsold new homes and foreclosed properties.

Making matters worse, rates on 30-year mortgages have been above 6 percent since late May, leading to a steep decline in new applications.

The 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. Sales are considered pending when the seller has accepted an offer, but the deal has not yet closed.

Wall Street economists surveyed by Thomson/IFR had predicted the index would come in at 87. The index, which sank 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.

Pending sales fell around the United States, sinking the most in the South, and the least in the West.

Jim Bringhurst, a former president of the Utah Association of Realtors, said that each market is different within regions, and while some areas along the Wasatch Front are seeing high demand, others still have a high volume of unsold inventory.

"There is some hesitation from buyers because of what they're hearing nationally with the housing market and the economy," he said. "The areas with the more established neighborhoods and at more affordable price points are still pretty hot markets."

Established areas with prices below $400,000 are among the most active in Salt Lake City, while areas with large, new subdivision inventory are selling at much lower rates, he said.

Despite the negative national numbers, "the worst of the hemorrhaging is behind us," and a modest recovery is likely to take shape next year, said Bernard Baumohl, managing director of the Economic Outlook Group.

Homeowners shouldn't get too excited, though, as Baumohl predicts median prices will show year-over-year gains of no more than 6 percent by next year.

By the Realtors' measurement, prices nationwide were down 6.3 percent in May, but are falling faster in big cities. The Standard & Poor's/Case-Shiller home price index of 20 cities fell by 15.3 percent in April compared with a year ago, dropping prices to their lowest levels since August 2004.

Meantime, shares of mortgage financiers Fannie Mae and Freddie Mac stabilized Tuesday, a day after plunging to early-1990s levels on worries they might need billions of dollars in new capital if a new accounting rule is put into effect.

Fannie Mae shares rose $1.88, or 11.9 percent, to $17.62 Tuesday, a day after plunging more than 16 percent. Freddie Mac shares rose $1.55, or 13 percent, to $13.46 after sliding nearly 18 percent Monday.

The federal regulator for the two companies, Office of Federal Housing Enterprise Oversight Director James Lockhart, said in a CNBC interview the accounting changes "would really have no impact on the risk of these firms." It would "make no sense" to mandate extra capital due to accounting changes, he said.