Economists polled by Reuters had forecast new home sales, which account for about 9.7 percent of overall home sales, gaining 0.7 percent to a rate of 565,000 units last month.
New home sales, which are derived from building permits, are volatile on a month-to-month basis and subject to large revisions. Sales were up 12.8 percent compared to February 2016, showing the housing market's resilience.
Sales last month were likely partially buoyed by unseasonably warm weather.
Most economists see a limited impact on housing from higher mortgage rates because a tightening labor market is improving employment opportunities for young adults. The market for new houses is benefiting from a shortage of properties for sale.
A report on Wednesday showed a 3.7 percent drop in sales of existing homes in February amid tight inventories and rising house prices. The 30-year fixed mortgage rate is currently around 4.30 percent.
Last month, new single-family homes sales slumped 21.4 percent in the Northeast region. Sales surged 30.9 percent to their highest level since November 2007 in the Midwest and increased 3.6 percent in the South.
They jumped 7.5 percent in the West. The inventory of new homes on the market increased 1.5 percent to 266,000 units last month, still less than half of what it was at its peak during the housing boom in 2006.
At February's sales pace it would take 5.4 months to clear the supply of houses on the market, down from 5.6 months in January.
A six-month supply is viewed as a healthy balance between supply and demand. The median price for a new home fell 4.9 percent to $296,200 in February from a year ago.