Sales of previously occupied US homes fell for the third month in a row in August, as higher mortgage rates, rising prices and a dearth of properties on the market discouraged many would-be homebuyers.

Existing home sales fell 0.7% last month from July to a seasonally adjusted annual rate of 4.04 million, the National Association of Realtors said Thursday. That’s below the 4.10 million pace that economists were expecting, according to FactSet.

Sales slumped 15.3% compared with the same month last year.

The national median sales price rose 3.9% from August last year to $407,100, marking the third month in a row that the median price remained above $400,000.

“Home prices continue to march higher despite lower home sales,” said Lawrence Yun, the NAR’s chief economist. “Supply needs to essentially double to moderate home price gains.”

The shortage of homes for sale has kept the market competitive, driving bidding wars in many places, especially for the most affordable homes. About 31% of homes purchased last month sold for more than their list price, Yun said.

“Sales are down, people are struggling to buy a home, but prices are going up,” Yun said.

All told, there were 1.1 million homes on the market by the end of last month, down 0.9% from July and 14.1% from August last year, the NAR said.

The latest housing market figures are more evidence that many house hunters are being held back by a persistently low inventory of homes for sale and rising mortgage rates.

Because home sales typically take about a month to be finalized once a contract is signed, transactions in August happened as the rate for a 30-year mortgage averaged just under 7%.

The weekly average rate on a 30-year home loan climbed jumped hit 7.23% last month, the highest level in more than 22 years, and has held above 7% since August, according to mortgage buyer Freddie Mac.

High rates can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already unaffordable to many Americans. They also discourage homeowners who locked in those low rates two years ago from selling.

Mortgage rates have been echoing moves in the 10-year Treasury yield, which lenders use as a guide to pricing loans. The yield has been climbing amid expectations that the Federal Reserve will keep short-term interest rates higher for longer to fight inflation.

On Wednesday, Federal Reserve policymakers signaled that they expect to raise rates once more this year and envision their key rate staying higher in 2024 than most analysts had expected.

The 10-year Treasury yield surged to 4.46% in morning trading Thursday, up from 4.40% late Wednesday and from 0.50% three years ago. It’s now near its highest level since 2007.

“It’s possible mortgage rates may go up to 8% in the short run,” Yun said.