Sales of newly built, single-family homes slowed 1.6 percent to a seasonally adjusted annual rate of 313,000 units in February, according to data jointly released by HUD and the U.S. Commerce Department.

"While many builders are seeing more traffic through their model homes as the spring buying season gets underway, tight lending conditions and appraisal issues continue to pose significant obstacles to prospective purchasers," noted Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. "These hurdles are definitely slowing the momentum of the housing and economic recovery."

"To some extent, we believe that exceptionally good weather conditions in December helped pull some home sales forward that would otherwise have occurred in January and February, which partially accounts for the declines we've seen at the beginning of this year," said NAHB Chief Economist David Crowe. "However, the February sales rate is still 11.4 percent above its year-ago level, and the quarterly average sales pace is at a two-year high. Meanwhile, the inventory of new homes for sale remains at an all-time record low, in part because of the lack of available financing for new-home production."

Crowe also noted that the sales report indicated greater buying activity in the above-$200,000 range in February. This suggests that those who have higher incomes and can more easily qualify for a mortgage are the ones who are moving forward with a home purchase, while first-timers who are looking in the lower price ranges may be having a tougher time getting qualified, he said.

Regionally, new-home sales increased 14.3 percent in the Northeast and 8.0 percent in the West, but declined 2.4 percent in the Midwest and 7.2 percent in the South in February. Meanwhile, the inventory of new homes for sale held unchanged at a record low of 150,000 units in February. This is a 5.8-month supply at the current sales pace.