A report released by the Commerce Department on Tuesday showed a substantial increase in new home sales in the U.S. in the month of March.

The Commerce Department said new home sales spiked by 8.8 percent to an annual rate of 693,000 in March after plunging by 5.1 percent to a revised rate of 637,000 in February.

Economists had expected new home sales to rise to an annual rate of 668,000 from the 662,000 originally reported for the previous month.

New home sales in the Northeast helped lead the way higher, skyrocketing by 27.8 percent during the month to an annual rate of 46,000.

New home sales in the West and South also surged by 8.6 percent and 7.7 percent, respectively, while new home sales in the Midwest jumped by 5.3 percent.

Meanwhile, the report also said median sales price of new houses sold in March was $430,700, down 1.9 percent from $438,900 a year ago.

The estimate of new houses for sale at the end of March was 477,000, while represents a supply of 8.3 months at the current sales rate.

A separate report released by the National Association of Realtors last Thursday showed a sharp pullback by existing home sales in the U.S. in the month March.

NAR said existing home sales plunged by 4.3 percent to an annual rate of 4.19 million in March after surging by 9.5 percent to a rate of 4.38 million in February. Economists had expected existing home sales to slump to a rate of 4.20 million.