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 dipped 2.6 percent to a reading of 75.7.

That was the lowest on records dating back to 2001 and down nearly 19 percent from the same month a year earlier. The index has fallen by more than 40 percent from its peak in April 2005. May's reading was revised slightly downward to 77.7.

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 $8,000. However, once the tax credits expired on April 30, sales plunged.

Economists say the government incentives prompted many buyers who might have signed contracts during May and June to move their purchases up. That's one reason for the sharp decline.

But they also point to the 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, the highest level since August. 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.

Americans' confidence in the economy eroded further in July amid worries about a job market that has proven stubbornly stagnant. The report raised concerns about the overall economy and the back-to-school season.

The Conference Board, a private research group, said Tuesday that its Consumer Confidence Index slipped to 50.4 in July, down from the revised 54.3 in June. Economists surveyed by Thomson Reuters expected 51.0. The decline follows last month's nearly 10-point drop, from 62.7 in May, which marked the biggest since February, when the measure also fell 10 points.

The second straight month of declining confidence follows three months of increases.

With unemployment stuck near 10 percent and the stock market having wiped out gains made early this year, Americans are skittish about spending. A continuing stream of sobering economic data -- from disappointing job figures in May and June to weak housing numbers -- is increasing worries that the economic recovery is stalling just as government stimulus programs are disappearing.

CNNMoney reports that Robbins Geller Rudman and Dowd, the law firm that won $7.2 billion in a class-action suit against energy trade Enron, has sued Goldman Sachs (GS) for deceiving investors about the bank’s financial conditions.

The complaint asserts that Goldman, not only totally failed to exercise its obligations as a firm to disclose to investors vital information in the sale of Abacus 2007-AC1, a synthetic CDO that hinged on the performance of subprime residential mortgage-backed securities, but also “chose not to issue a Form 8-K alerting investors to this event and later even omitted this information from its Form 10-Qs. As a result, investors were unaware the SEC was even investigating ABACUS 2007-AC1.”

The lawsuit seeks to represent investors who bought shares between Oct. 15, 2009, and April 16 of this year at artificially inflated prices, a time which coincides with Goldman’s hesitation to reveal that it had received a Wells notice from the SEC, indicating the federal regulator intended to enforce charges against the Abacus deal.

The suit names CEO Lloyd Blankfein, CFO David Viniar and President Gary Cohn among the defendants.