U.S. home sales dropped more than expected in April as a shortage of properties for sale continued to weigh on the market.

The National Association of Realtors said on Thursday that existing home sales fell 2.5 percent to a seasonally adjusted annual rate of 5.46 million units last month. March’s sales pace was unrevised.

The retreat in existing home sales comes after two straight months of increases. Such sales account for about 90 percent of U.S. home sales. Economists polled by Reuters had forecast existing home sales to decline 0.2 percent last month.

On a year-on-year basis, existing home sales fell 1.4 percent in April.

Across the nation’s four regions, sales slid the most in the Northeast, which saw a decline of 4.4 percent. Sales also fell in the South and West, while the Midwest was unchanged.

The U.S. unemployment rate is now at a 17-1/2-year low, but a lack of housing inventory has hampered sales. This has also pushed up home prices, keeping many first-time buyers out of the market. Mortgage rates are also at a seven-year high.

The number of previously owned homes for sale increased 9.8 percent to 1.80 million units in April, but housing inventory was down 6.3 percent from one year ago. Supply has declined for 35 consecutive months on a year-on-year basis.

“Home sales are stuck and they are not breaking out,” NAR Chief Economist Lawrence Yun said. “With the interest rate rising … it is burdening consumers on housing costs.”

At April’s sales pace, it would take 4.0 months to clear the current inventory, down from 4.2 months a year ago.

The median house price increased 5.3 percent from one year ago to $257,900 in April. It marked the 74th straight month of year-on-year price gains.

Source: cnbc economy
Existing home sales drop 2.5% in April