New home sales unexpectedly increase in February, bouncing back from a record low in January according to a government report released Wednesday.

The Commerce Department said that the sales of new homes increased 4.7 percent last month to a seasonally adjusted annual rate of 337,000 in February from a revised 322,000 in January. This was the first time the sales increase since July 2008.

While February sales were up from January's record low, it still 48 percent below the February 2008’s level when sales were about 572,000.It is still the second-worst on record.

In the report, the median sales price of new homes sold in February fell to $200,900, down 18% from $245,300 same month last year considered as the sharpest year-over-year decline in history.  The median price is the midpoint, where half sell for more and half for less.

Also in the report is the inventory of new homes for sale at the end of February which was a seasonally adjusted 330,000. With the current sales pace, the government said it would take over a year to exhaust the supply of new homes on the market. The sales pace is also affected by the glut of unsold homes and competition from deeply discounted foreclosed properties which puts in more pressure on prices.

Some analyst sees that the rise in new home sales has been influenced by the stimulus signed by President Barack Obama wherein first time buyers are given $8,000 tax credit.

In February, sales increased nearly 10 percent in the South and 7 percent in the West compared to previous month.  Drops were recorded in the Midwest by 9 percent and in the Northeast by 3 percent.