July 29 (Reuters) - Contracts to purchase previously owned U.S. homes declined in June in step with a spike in home prices after rebounding strongly in the prior month. The National Association of Realtors (NAR) said on Thursday its Pending Home Sales Index, based on contracts signed last month, fell 1.9% to 112.8. Economists polled by Reuters had forecast pending home sales would increase 0.3%. Pending home sales for May were revised to show an increase of 8.3% instead of the 8.0% gain previously reported. Pending home contracts are seen as a forward-looking indicator of the health of the housing market because they become sales one to two months later. “Pending sales have seesawed since January, indicating a turning point for the market,” Lawrence Yun, NAR’s chief economist, said in a statement. “Buyers are still interested and want to own a home, but record-high home prices are causing some to retreat.” Compared with one year ago, pending home sales were down 1.9%. Sharp drops in pending home sales in the South and West in June outweighed modest increases in the Northeast and Midwest. (Reporting by Evan Sully Editing by Paul Simao) Our Standards: The Thomson Reuters Trust Principles.