The U.S. pending home sales index fell 1.3% to a reading of 106.4 in April from the upwardly revised 107.8 in March, according to the National Association of Realtors, or NAR.
The index, which is based on contract signings, declined month over month in the Midwest, South and West census regions.
On an annualized basis, pending home sales were down 2.1%.
NAR chief economist Lawrence Yun said demand for home-buying is "very robust," but the "severe" housing shortages in much of the U.S. are holding back the market.
"The unfortunate reality for many home shoppers is that reaching the market will remain challenging if supply stays at these dire levels," Yun said.
Rising mortgage rates and gas prices could also lead to hesitation among some potential home buyers, Yun added.
"[I]t all comes down to overall supply," he said. "If more new and existing homes are listed for sale, it would allow home prices to moderate enough to stave off inflationary pressures and higher rates."
