Sales of new U.S. single-family homes unexpectedly fell for a third straight month in February, weighed down by steep declines in the Midwest and West.

The Commerce Department said on Friday new home sales dropped 0.6 percent to a seasonally adjusted annual rate of 618,000 units last month. January's sales pace was revised up to 622,000 units from the previously reported 593,000 units.

Economists polled by Reuters had forecast that new home sales, which account for 10 percent of housing market sales, would rise 4.4 percent to a pace of 623,000 units last month. New home sales are drawn from permits and tend to be volatile on a month-to-month basis.

They rose 0.5 percent from a year ago. Sales decreased 3.7 percent in the Midwest and 17.6 percent in the West, which has experienced rapid price growth amid a shortage of homes for sale. They rebounded 19.4 percent in the Northeast and 9.0 percent in the South, which accounts for the bulk of new home sales.

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