Annual sales of at least 700,000 new homes are considered the sign of a healthy market.
Median prices also fell in February, to $202,100, the lowest since 2003, when the last decade's housing boom was beginning, the census data showed. At the end of 2003, the median price of a new home was $195,000. (Median is the middle number; half the houses sold for more, half for less.)
The February median price was 13.9 percent below January's $234,800 and fell 8.9 percent from February 2010's $221,900, the Census Bureau reported.
Sales declined in every region of the country. With 11,000 sales, the South had more than the other three regions combined. Just 1,000 new homes were sold in the northeastern United States.
As sales and prices plummeted, the inventory of new homes rose to 8.9 months at the current pace, "indicating that the housing market is still bouncing around the bottom," said IHS Global Insight senior economist Chris G. Christopher Jr.
Christopher said that though employment growth was relatively stronger, it had been "adding to continued demand for automobiles," not helping the housing market.
Builders in all parts of the country, but especially the West, continue to compete against distressed properties. Despite legal issues surrounding their processing, foreclosures remain at record levels, driving down prices.
The situation has affected the market for previously owned homes, as well, with the National Association of Realtors reporting on Monday a 9.6 percent sales drop in February from January.
The National Association of Home Builders used the February new-homes report to criticize "policymakers who are considering major changes to the nation's housing-finance system and to crucial tax incentives for homeownership," said chief economist David Crowe.
The builders group joined the Realtors' association and others in urging the Obama administration not to consider a proposal requiring high down payments for mortgages to help reduce lender and investor risk.
That would "make a near-term housing recovery almost impossible" and jeopardize economic recovery, the builders said.
Joel L. Naroff, of Naroff Economic Advisors in Bucks County, said he found it difficult to make sense of a report in which sales in the northeastern part of the country have largely disappeared.
"Nevertheless, I have to say something, so let's start with the simple reality that housing is a basket case and is not showing any signs of improving," Naroff said.
Contact real estate writer Alan J. Heavens at 215-854-2472, firstname.lastname@example.org or Twitter: @alheavens.