Sales of previously owned homes slipped to a seven-month low in June in another troubling sign for the U.S. economy.

The National Association of Realtors said Tuesday that existing homes sales fell eight-tenths of a percent last month, putting the country on pace for just under 4.8 million home sales this year. That would be worse than last year when sales of previously owned homes dipped to a 13-year low.

The realtors' group also said an alarming number of Americans backed out of contracts to buy previously owned homes last month. The report said cancelations jumped to 16 percent in June from just 4 percent in May.

High unemployment and a weak economy have hurt the U.S. housing market.

Top U.S. officials have said the collapse of the country's housing market was one of the key factors behind the recession. They say a healthier housing market is needed to ensure a smoother economic recovery.

Despite slipping demand for previously owned homes, a Commerce Department report Tuesday found demand for new homes kept U.S. builders busy last month, pushing the number of new home construction projects to a five month high.

Separately Wednesday, the U.S. Treasury Department said it distributed $214 million to 17 community banks across the country to help get loans to small businesses.

The funding is part of a program to give small businesses access to credit so they expand and hire more workers.