Existing-home sales in the U.S. declined for the second straight month in January and posted its largest decrease in over three years on an annual basis as housing inventory shortage continues to hurt the housing market.

Total sales dropped 3.2% to a seasonally adjusted annual rate of 5.38 million in January from a downwardly revised 5.56 million in December 2017, the National Association of Realtors, or NAR, said.

Year over year, existing-home sales were down 4.8% in January. The median existing-home price for all housing types for the month stood at $240,500, up 5.8% from a year ago.

Total housing inventory increased 4.1% to 1.52 million existing homes available for sale at the end of January. However, it is still 9.5% lower year over year, down for the 32nd straight month. Unsold inventory was at 3.4-month supply at the current sales pace, down from 3.6 months a year ago.

"The utter lack of sufficient housing supply and its influence on higher home prices muted overall sales activity in much of the U.S. last month," NAR chief economist Lawrence Yun said. "It's very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth."