(Bloomberg) -- A gauge of pending US existing-home sales tumbled to a four-year low in April as higher mortgage rates cast a pall on the spring selling season.

An index of contract signings from the National Association of Realtors dropped 7.7% to 72.3, the lowest reading since the early months of the pandemic. The monthly decline was steeper than all estimates in a Bloomberg survey of economists and the worst since February 2021. All US regions saw decreases from a month earlier.

“The impact of escalating interest rates throughout April dampened home buying, even with more inventory in the market,” NAR Chief Economist Lawrence Yun said in a statement. “But the Federal Reserve’s anticipated rate cut later this year should lead to better conditions, with improved affordability and more supply.”

Contract closings on previously owned homes have been stuck near the annualized 4 million mark for more than a year as buyers struggle with high prices and mortgage rates near 7%. At the same time, sellers are reluctant to give up mortgages carrying much lower rates.

Sales were well over 6 million a year at the height of the pandemic-era buying spree in fall 2020. 

New data suggest buyers aren’t getting any relief on costs, either. Prices in 20 major US cities actually picked up the pace in March, rising 7.4% from a year ago, according to a S&P CoreLogic Case-Shiller index. 

Price increases should finally taper off when more inventory hits the market, Yun said in a release Thursday, although for now, the 1.2 million homes on the market are well below prepandemic levels.

“The prospect of measurable home price declines appears minimal,” Yun said. “The few markets experiencing price declines will be viewed as second-chance opportunities for buyers to enter the market if those regions continue to add jobs.”

While many are awaiting a move by the Fed to cut interest rates, officials are widely expected to keep rates at a 23-year high at their next meeting in June. 

The Midwest saw the biggest drop in pending sales, down 9.5% in April, followed by declines of 8.5% and 7.6% in the West and South, respectively. Contract signings in the Northeast fell 3.5%.

The pending-sales report tends to be a leading indicator of sales of previously owned homes, because houses typically go under contract a month or two before they’re sold.

--With assistance from Chris Middleton.

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