Signed contracts to purchase existing homes dropped 20% in June compared with the same month a year ago, the National Association of Realtors said Wednesday.

That is the slowest pace since September 2011, with the exception of the first two months of the coronavirus pandemic lockdowns, when sales plunged briefly and then rebounded strongly.

On a monthly basis, pending home sales fell a wider-than-expected 8.6% in June. A Dow Jones survey of economists had predicted a 1% drop.

The decline coincided with a sharp jump in mortgage interest rates. The average on the 30-year fixed loan crossed over 6% in the middle of June, according to Mortgage News Daily. It started the year around 3%. High rates and inflation in the general economy are hitting buyer sentiment hard.

“Contract signings to buy a home will keep tumbling down as long as mortgage rates keep climbing, as has happened this year to date,” said Lawrence Yun, chief economist for NAR. “There are indications that mortgage rates may be topping or very close to a cyclical high in July. If so, pending contracts should also begin to stabilize.”

The drop in sales was widespread, with the South and West seeing the worst of it. In the Northeast, pending sales fell 6.7% compared with May and were down 17.6% from June 2021. Sales were off 3.8% for the month in the Midwest and down 13.4% annually.

In the South, sales declined 8.9% monthly and 19.2% from the previous year, and in the West sales tumbled 15.9% monthly and 30.9% from June 2021.

Another report on sales of newly built homes in June, which are also counted by signed contracts, showed a similar drop, according to the U.S. Census. Builders are now offering more incentives to offload rising inventory, although prices are still higher than they were a year ago.

The NAR is now forecasting total sales for this year will be down 13%, but that sales should start to rise in early 2023. Much of that will depend on where mortgage rates end up, however.

“Looking ahead, a slowdown in economic activity and pullback in business investments could lead to a moderation in the pace of mortgage rate gains, as investors shift allocations toward the safety of bonds,” said George Ratiu, senior economist at Realtor.com. “Combined with the increase in housing supply, we could see improved opportunities for homebuyers later in the year.”