Higher interest rates and lower inventory levels had an impact on U.S. pending home sales in June, according to the latest Pending Home Sales Index from the National Association of REALTORS® (NAR).

Contract signings in June were down 0.4 percent compared to May but were 10.9 percent higher than June 2012. Lawrence Yun, NAR chief economist said that not all contracts will go to closing and some buyers may change their minds if mortgage interest rates rise too much before closing.

“Closed sales may edge down a bit in the months ahead, but they’ll stay above year-ago levels,” he said.

Watch a new video on June pending home sales from NAR.