Sales of new U.S. homes fell 3.9 percent in February to the lowest rate in nearly seven years while the number of new homes on the market grew, according to a government report on Monday that showed more signs of weakness in the housing sector.

The monthly decline was the second straight and the volume of sales fell to their lowest level since June 2000, when they hit 793,000.

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New single-family home sales fell to an annual rate of 848,000 units from a downwardly revised rate of 882,000 in January, the Commerce Department said.

Analysts polled by Reuters were expecting February sales to rise to 985,000 from the previously reported rate of 937,000 units in January.

In February, the median sales price of a new home rose $6,800 to $250,000 from $243,200 in January.

At the current sales pace, the supply of new homes available rose to 8.1 months at the current sales pace, the highest rate since January 1991, from 7.3 months in January.

The Commerce Department's data comes days after a real estate trade group reported a stronger-than-expected month of existing home sales.

The sales pace of previously owned homes rose 3.9 percent in February, the biggest gain since March 2004 the National Association of Realtors said on Friday. Home resales, which represent 85 percent of the housing market, climbed to a 6.69 million-unit annual rate.

Across the regions, the West saw the only increase in new-home sales with a 24.6 percent increase. In the Northeast, new home sales fell 26.8 percent while the decreased 20 percent in the Midwest and 7 percent in the South.

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