The U.S. Commerce Department announced on Thursday that the sales of new single-family homes decreased 6.9 percent m-o-m to a seasonally adjusted annual rate of 673, 000 units in April, as prices surged, but demand for housing remains underpinned by lower mortgage rates.

Economists had forecast the sales pace of 675,000 last month.

March’s sales pace was revised up to 723,000 units from the originally reported 692,000 units.

According to the report, new home sales in the South, the largest area, fell 7.3 percent m-o-m in April, while sales in the Midwest dropped 7.4 percent m-o-m and those in the West declined 8.3 percent m-o-m. Meanwhile, sales in the Northeast surged 11.5 percent m-o-m.

In y-o-y terms, new home sales recorded a 7.0 percent advance in April.