The number of buyers who signed contracts to purchase homes dropped in June, as the weak economy and tight lending standards kept consumers away from the housing market.

The National Association of Realtors said Tuesday that its seasonally adjusted index of sales agreements for previously occupied homes dipper 2.6% to a reading of 75.7.

That was the lowest on records dating back to 2001 and down nearly 19% from the same month a year earlier. The index has fallen more than 40% from its peak in April, 2005.

High unemployment, weak job growth, and tight credit have hurt the housing market. Sales picked up in the spring when the government was offering tax credits of up to $8000. However, once the tax credits expired on April 30th, sales plunged.

There is a growing inventory of unsold homes on the market. It has risen to almost 4 million. That’s nearly a nine-month supply at the current sales pace. It compares with a healthy level of about six months. And that doesn’t include millions of foreclosed homes that have yet to go onto the market.

“There’s too much supply for the demand that’s there,” said Michael Feder, chief executive of Radar Logic, Inc, which tracks the housing market. “That’s not a dynamic in which values go up.”

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