Fewer consumers signed contracts to buy U.S. homes last month as the spring buying season revs up with stiff competition for homes amid lagging inventory.

The National Association of Realtors said Thursday that its pending home sales index slipped 0.8 percent to 111.4 in March, from 112.3 in February.

Lawrence Yun, chief economist for the Realtors, said that even with the dearth of inventory, activity was still strong enough to be the third best in the past year. He said the low supply of homes could mean higher prices in the months ahead.

"Sellers are in the driver's seat this spring as the intense competition for the few homes for sale is forcing many buyers to be aggressive in their offers," Yun said.

The Realtors reported last week that Americans had purchased homes in March at the fastest pace in over a decade, as more people seek to close deals with home prices on the rise.

Although they had ticked down the past few weeks, average interest rates on a typical 30-year mortgage are back over 4 percent again. Rates are expected to continue to rise from last year's record lows, another reason people are eager to buy. The bad news for buyers is that the number of houses for sale has dropped to its lowest level in nearly 20 years.

Regionally, only the South saw an increase in signed contracts last month, up 2.9 percent. Signed contracts in the Northeast and West both declined 2.9 percent. The Midwest saw a 1.2 percent decline.

Pending sales contracts are a barometer of future purchases. A sale is typically completed a month or two after a contract is signed.