U.S. home sales dropped more than expected in April as a shortage of properties for sale continued to weigh on the market.

The National Association of Realtors said on Thursday that existing home sales fell 2.5 percent to a seasonally adjusted annual rate of 5.46 million units last month. March's sales pace was unrevised.

The retreat in existing home sales comes after two straight months of increases. Such sales account for about 90 percent of U.S. home sales. Economists polled by Reuters had forecast existing home sales to decline 0.2 percent last month.

On a year-on-year basis, existing home sales fell 1.4 percent in April.

Read more in CNBC.