WASHINGTON, (Reuters) – U.S. home sales fell to their lowest point in almost two years in April. House prices rose to a new record amid a lack of stock.

The seasonally adjusted annual rate for existing home sales was 5.61million units, down 2.4% from June 2020. This is the lowest point since the COVID-19 lockdown slump in June 2020. The decline was the third consecutive month in monthly sales.

Reuters polled economists and found that sales were expected to fall at a rate 5.65million units. While sales rose in the Northeast, Midwest and West, they fell in South and West.

The bulk of U.S. home sales are through home resales. They declined by 5.9% year-on-year.

It is likely that April saw the majority of sales due to closings on contracts which were signed between one- and two months back before rising mortgage rates. Another decline is possible as March’s contracts dropped for the fifth month straight.

According to data from the mortgage finance agency, the average 30-year fixed rate mortgage was 5.30% in the week ending May 12. This is the highest level since July 2009. Freddie Mac (OTC:). Since mid-March, when the Federal Reserve raised interest rates to reduce high inflation and cool domestic demand, it has risen by over 100 basis points.

In April, the median home price increased by 14.8% over a previous year to an unprecedented $391,000. The South saw a 22% increase in median home prices, due to a dramatic rise in American migration from other parts of the country.

The market was dominated by the higher-priced end, despite a shortage of affordable entry-level homes.

The number of homes that were previously owned was 1.03million, which is 10.4% less than a year earlier.

The supply is expected to stay tight. According to the government, building permits for single family housing fell six months ago. This is the biggest segment of the market.

The current home inventory would be exhausted in 2.2 months at the April sales pace. That’s a decrease of 2.3 months from last year, when it was 2.3 months. The healthy balance of supply and demand is considered to be a six- to seven-month supply.

Most properties stayed on the marketplace for less than a month, and were generally unchanged over the past year. 88% of April’s homes were sold within a month. 22 percent of all sales were made by first-time buyers. 22 percent of all transactions were made in cash.