Housing activity slowed for a second straight month in March.

Existing home sales fell 2.7% to a seasonally adjusted 5.77 million units in March from a month earlier, according to the National Association of Realtors (NAR). Home sales fell across all regions in the U.S. from February. The NAR also revised February existing home sales downward to 5.93 million from 6.02 million. The number of sales was down 4.5% from the same month a year ago. The results came in better than analysts' expectations of a 4.1% month-over-month decline to 5.78 million units, according to Bloomberg consensus estimates.

“We are going back to pre-COVID home sales level activity. We had a surge of activity with low interest rates, work from home and larger home demand,” said Lawrence Yun, chief economist at NAR, adding that those trends are now coming to an end because mortgage rates are rising. Just last week, the 30-year fixed mortgage rate, the most common home loan, hit 5% after hovering above 4% for most of this year.

The results were expected as pending home sales, an indicator of actual housing sales since it represents signed contracts, have fallen four straight months. The housing market has been stymied by the ongoing lack of homes for sale.

Home price growth slowed but remained elevated. The median existing-home price for all housing types in March was $375,300, up 15.0% from $326,300 in March 2021, as prices rose in each region. This marks another high and the longest-running streak on record.

“Home prices have consistently moved upward as supply remains tight,” Yun said. “However, sellers should not expect the easy-profit gains and should look for multiple offers to fade as demand continues to subside.”

Housing inventory at the end of March totaled 950,000 units, up 11.8% from February and down 9.5% from 1.05 million one year ago, according to the NAR. Unsold inventory sits at a two-month supply at the present sales pace, up from 1.7 months in February and down from 2.1 months in March 2021.

The uptick in inventory is expected as we enter the spring season, noted Yun, adding that “inventory is heading in the right direction.”

“Housing demand remains robust, even in the face of fast-rising mortgage rates,” said Danielle Hale, chief economist for Realtor.com, in a press statement ahead of the results. “At the same time, the number of home sellers continues to trail what the market has seen in prior years meaning that relatively low numbers of homes for sale remain an obstacle for buyers, even as we move past the seasonal low-point in the number of options for homebuyers.”