(Bloomberg) -- A gauge of pending US previously owned home sales fell in August to the lowest level since April 2020, evidence of a resale market throttled by higher mortgage rates. 

The National Association of Realtors’ index of contract signings tumbled 7.1% to 71.8 from July, the group reported Thursday. The decline was larger than all estimates in a Bloomberg survey of economists.

“Some would-be home buyers are taking a pause and readjusting their expectations,” Lawrence Yun, NAR’s chief economist, said in a statement. “It’s clear that increased housing inventory and better interest rates are essential to revive the housing market.”

Compared with a year earlier, pending home sales were down nearly 19% on an unadjusted basis.

Mortgage rates, which surged to an almost 23-year high last week, continue to thwart demand. That, combined with still-high prices and limited inventory, is contributing to one of the most unaffordable housing markets ever.

Higher borrowing costs are also dissuading homeowners from listing their properties, keeping prices elevated. Homeowners who locked in lower mortgage rates in recent years are hesitant to move.

The pending-home sales report is a leading indicator of existing-home sales given houses typically go under contract a month or two before they’re sold.

All regions saw declines in August. Contract signings in the South fell to the lowest level since 2010, while the West posted the weakest reading in data back to 2001.

--With assistance from Chris Middleton.

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