U.S. pending homes sales declined sharply in May as the government tax credit policy for the housing market expired, according to a report released Thursday by a leading U.S. housing research organization. The National Association of Realtors's Index of Pending Homes -- previously owned homes -- dropped 30.0 percent to 77.6 in May from 110.9 in April and was 15.9 percent lower than the May 2009 reading of 92.3. Lawrence Yun, NAR chief economist, said the declining sales in pending homes were mainly caused by the expiration of government stimulus. 'Consumers are rational and they rushed to meet the tax credit eligibility deadline in April. The sharp decline in contract signings in May is a natural result with similar low levels of sales activity anticipated in June,' he said. Yun noted the tax credit had broadly stabilized home prices. 'Without the tax credit, there will be more aggressive price negotiations between buyers and sellers,' Yun said. 'The key test on whether the housing market can stand on its own without stimulus medicine will depend critically on private- sector job creation in the second half of the year.' Many economists believe that the U.S. economic growth may slow down in the second half of the year as the government stimulus policies wane. The housing slump, which started in 2006 after having experienced white-hot five years, is still underway due to tight credit markets, souring consumer confidence in the overall economy and high unemployment. 