U.S. pending home sales fell in February by the most since April as rising home prices and a shortage of available properties deterred buyers.

The National Association of Realtors’ index of pending home sales decreased 10.6 per cent from the prior month to 110.3, the lowest reading since May, according to data released Wednesday. The median estimate in a Bloomberg survey of economists called for the measure to fall 3 per cent.

Surging home prices and low inventory are slowing the pandemic-era housing boom, evidenced by declines in contract signings in all four U.S. regions. In addition, severe winter weather limited purchases during February. At the same time the average rate for a 30-year fixed-rate mortgage has been increasing, which may affect buyer demand in the coming months. Contract signings were down 2.7 per cent from the same period in 2020 on an unadjusted basis.

“The demand for a home purchase is widespread, multiple offers are prevalent, and days-on-market are swift but contracts are not clicking due to record-low inventory,” Lawrence Yun, chief economist at the NAR, said in a statement.

By region, contract signings fell the most in the South, where winter storms curtailed business activity and led to a 13 per cent slump in pending home sales. In the Midwest, sales declined 9.5 per cent and in the Northeast they fell 9.2 per cent. In the West, they decreased 7.4 per cent

While borrowing costs are expected to rise, NAR’s Yun said he doesn’t expect mortgage rates to exceed 3.5 per cent in 2021.