By Nicole Friedman

The nationwide house-buying frenzy eased in April, as home prices climbed to new highs and the supply of available properties remained low.

Existing-home sales fell 2.7% in April from March to a seasonally adjusted annual rate of 5.85 million, the third straight monthly decline, the National Association of Realtors said Friday. April sales rose 33.9% from a year earlier, when Covid-related lockdowns caused a sharp drop in home sales.

Economists surveyed by The Wall Street Journal expected a 0.2% monthly increase in sales of previously owned homes, which make up most of the housing market.

Home sales have boomed in the past year as historically low mortgage-interest rates and a wave of millennials entering their prime homebuying years spurred strong demand. But buyers are competing for a limited number of homes for sale, and fast-rising house prices are pushing some prospective homeowners out of the market.

The median existing-home price rose 19.1% in April from a year earlier to $341,600, a record high, NAR said. The annual price appreciation was the strongest in data going back to 1999.

"Even with home sales declining modestly, one can describe the market as being hot," said Lawrence Yun, NAR's chief economist. However, "the low inventory continues to hinder sales activity."

Homes are selling unusually quickly. The typical home that sold in April spent 17 days on the market, the fastest pace on a decade of records, NAR said.

The country's fastest housing market in April was Indianapolis, where the typical home went under contract after four days, according to brokerage Redfin Corp.

"Hopefully the inventory comes back up, because it's just been nuts," said Chris Golightly, a real-estate agent in Indianapolis. "It's fantastic for the seller, but it sure can create some really frustrated potential buyers."

There were 1.16 million homes for sale at the end of April, up 10.5% from March and down 20.5% from April 2020. At the current sales pace, there was a 2.4-month supply of homes on the market at the end of April.

Kevin McGrath and Kendra Mahoney made three unsuccessful offers to buy homes in the Boston suburbs before getting one accepted in April. For the house they bought, they viewed it the first day it was on the market and brought an inspector with them to the showing, Mr. McGrath said. That helped them feel comfortable putting in an offer that didn't require a home inspection, to make their bid more appealing to the seller. The sale closed in May.

"I have a lot of empathy for anyone going through the process right now. It's really tough," Mr. McGrath said. "We were just so relieved that something ended up working out for us."

Existing-home sales fell the most month-over-month in the Northeast, down 3.9%, and in the South, down 3.7%. Sales rose 0.8% in the Midwest.

Sales were especially strong at the high end of the market, with the number of homes selling that were priced over $1 million more than tripled in April compared with a year earlier, according to NAR.

Demand for newly built homes has also climbed in the past year. But builders' ability to increase production is limited by land supply and material costs.

Housing starts, a measure of U.S. home-building, fell 9.5% in April from March, the Commerce Department said this week. Residential permits, which can be a bellwether for future home construction, rose 0.3%.

"The big story in the housing market is all the constraints on builders, " said Robert Frick, corporate economist at Navy Federal Credit Union. "The supply is just too low."

News Corp, owner of The Wall Street Journal, also operates Realtor.com under license from the National Association of Realtors.

Write to Nicole Friedman at nicole.friedman@wsj.com

(END) Dow Jones Newswires

05-21-21 1032ET