U.S. sales of new homes declined in February as severe winter weather in parts of the country limited foot traffic against a backdrop of elevated prices that may be restraining momentum in housing.

Purchases of new single-family homes decreased 18.2% to a 775,000 annualized pace from an upwardly revised 948,000 rate in the prior month, government data showed Tuesday. The median forecast called for an 870,000 pace. Sales dropped in all regions across the U.S.

Housing demand is being restrained partly by a limited number of available properties that offer interested buyers fewer choices at the same time prices remain elevated. In February, inclement weather may have impeded the search for homes as temperatures dropped below freezing in some parts of the country and power disruptions hit states including Texas.

While the impact of inclement weather was not unexpected, "what is a bit of a surprise is how far sales fell, although the dip is likely temporary," said Zillow economist Matthew Speakman. "Materials prices have surged in recent months — lumber prices were up 59% year-over-year in February according to some measures, the largest annual jump since the 1940s. And these rising prices seem to be eating into otherwise unbridled homebuilder optimism."

Still, the pace of new home sales remains 8.2% on a seasonally adjusted basis above the same month last year, pointing to the housing market’s strength through the pandemic.

In the coming months, higher borrowing costs could put more pressure on affordability and keep some buyers out of the market. Mortgage rates have been slowly rising since mid-February as the U.S .economic outlook improves.