New home sales dropped sharply in April, missing economists' expectations and signaling that the US housing boom seen during the pandemic may be coming to an end.

Sales of new homes fell 16.6% in April to a seasonally adjusted annual rate of 591,000, the lowest level since April 2020, according to the US Commerce Department. Slowing sales are a result of rising interest rates and high home prices pushing buyers out of the market. The average interest rate for a conventional 30-year fixed-rate mortgage is hovering around 5.5%, up from around just 3% at the beginning of this year, making monthly mortgage payments more unaffordable for buyers. 

This is the fourth consecutive month of declining new home sales and the biggest monthly drop in nine years. 

"Mortgage rates have quickly gone from being a massive tailwind to the housing market to a massive headwind," Mark Zandi, chief economist of Moody's Analytics, told Bloomberg. "The higher rates are conflating with the extraordinarily high house prices and crushing affordability."

The median sales price for a new home in April of this year was $450,600, a 19.6% increase from a year ago, the Commerce Department said.