Sales of previously occupied U.S. homes fell for the third straight month in April as the number of properties for sale hit a record low, driving prices to new highs.

Existing home sales fell 2.7% last month from March to a seasonally-adjusted rate of 5.85 million annualized units, the National Association of Realtors said Friday. Sales jumped 33.9% from April last year, when the pandemic caused sales to slow sharply.

April's sales pace was the slowest since last June and well below the 6.01 million sales rate economists expected, according to FactSet.

"Even with home sales declining modestly, one can describe the market as being hot," said Lawrence Yun, NAR's chief economist." All indications is that buyer demand remains strong."

Sales through the first four months of this year are running 20% higher than they were a year ago, the NAR said.

The combination of solid demand and a dearth of homes on the market continues to drive up home prices. Last month, the U.S. median home price surged 19.1% from a year earlier to $341,600, an all-time high. Half of the homes on the market are selling for more than their list price, Yun said.

At the end of April, the inventory of unsold homes stood at just 1.16 million, an increase of 10.5% from March, but down 20.5% from April last year. At the current sales pace, that amounts to a 2.4-month supply, versus a 4-month supply a year earlier, the NAR said.

The low inventory of homes on the market is fueling heated competition among buyers, resulting in bidding wars and leading to homes selling at a breakneck pace.

Homes were typically snapped up within just 17 days of hitting the market last month, the fastest turnaround time on records going back to 2011, the NAR said. In April last year, homes typically sold in 27 days. All told, 88% of homes sold in April were on the market for less than a month.

The ultra-competitive market is making it hardest on first-time homebuyers, which accounted for 31% of homes sold last month, down from 36% a year earlier, the NAR said.

Low mortgage rates remain a positive for many would-be homebuyers, proving them with a measure of financial flexibility. The average rate on the benchmark 30-year loan rose to 3% this week for the first time since mid-April. It was 2.94% last week and 3.24% at this time last year, according to mortgage buyer Freddie Mac.