Continued drop in mortgage rates resulted in more home sales in the United States, the National Association of Home Builders (NAHB) said on Friday.

"The recent decline in mortgage rates have helped boost sales activity as home buyers take advantage of these lower interest rates," said Greg Ugalde, chairman of NAHB.

Mortgage rates dropped sharply this week. For the week ending March 28, 30-year fixed-rate mortgage (FRM) dropped 22 basis points to 4.06 percent, the U.S. Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, said on Thursday.

According to a data report released by the U.S. Census Bureau on Friday, sales of newly built, single-family homes rose to a seasonally adjusted annual rate of 667,000 units in February.

"This is the highest sales pace since March 2018," said NAHB.

However, rising costs and housing affordability problems persist, forcing home builders to be more cautious, even as mortgage rates dropped sharply.

"The new home sales data continue to show potential to grow sales at affordable price points that would be attractive for the entry-level buyer," said Robert Dietz, chief economist of NAHB.

"However, builders need to be mindful of housing costs as they try to meet this demand." Dietz added.