Sales of new U.S. single-family homes fell by the most in nearly three years in May as high mortgage rates and rising economic uncertainty sapped demand, lifting the supply of unsold houses on the market to the highest level since late 2007.

The count is based on signed contracts, meaning people out shopping in May, when mortgage rates remained stubbornly high.

New home sales retreated in May, experiencing their largest monthly decline in nearly 3 years. Sales were at a seasonally adjusted annual rate of 623,000, the lowest in 7 months.