Home contract signings took a nosedive in April as high mortgage rates and tariff uncertainty weighed on prospective buyers.

The Pending Home Sales Index fell 6.3% in April from a month earlier to 71.3, according to the National Association of Realtors. Economists had been expecting a more modest 1% decline. A reading of 100 is equal to the level of housing contract activity in 2001.

Year over year, pending contracts were down 2.5% nationwide. Contract activity was down month over month in all parts of the country and decreased year over year in all regions except the Midwest, which saw a 2.2% gain.

The latest drop in activity comes even as homebuyers have more to choose from in most markets. According to Realtor.com, nearly 1 million homes were active on the market in April, up more than 30% from a year earlier.

But prices are still near all-time highs, and mortgage rates remain well above 6%, making the market unaffordable for many.

“At this critical stage of the housing market, it is all about mortgage rates,” NAR chief economist Lawrence Yun said in a statement. “Despite an increase in housing inventory, we are not seeing higher home sales. Lower mortgage rates are essential to bring homebuyers back into the housing market.”

Read more: When will mortgage rates go down to 4%?

Last month, house hunters contended with particularly volatile mortgage rates and fresh economic uncertainty stemming from President Trump’s “Liberation Day” tariff announcements on April 2.

Investor panic in the aftermath of the tariff announcement sent stocks falling and bond yields and mortgage rates rising. Average 30-year mortgage rates started last month at around 6.64% before rocketing toward 7%. They finished the month at around 6.8% and have hovered there since.

Homes usually go under contract a month or two before they’re sold, and while not all contracts close, pending home sales are typically an early indicator of housing market activity.

Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.

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