Sales of new, single-family homes dropped 1.5 percent in March after being upwardly revised the month before, the NAHB said.
Citing government figures, single-family home sales were on pace for a 511,000 annual rate, the National Association of Home Builders said.
"Builders are slowly raising inventory as they remain cautious about the housing recovery," said NAHB Chairman Ed Brady, a builder and developer from Bloomington, Illinois.
Robert Dietz, the association’s chief economist, said the figures are not cause for worry.
"Though sales were flat this month, they are running modestly higher on a year-over-year basis," he said. "We expect the sales pace to rise through 2016, given ongoing low mortgage interest rates and healthy job creation."
The NAHB said new-home sales rose 18.5 percent in the Midwest, 5 percent in the South, were unchanged in the Northeast and fell 23.6 percent in the West.