This missed expectations for a 1.6 percent rise to an annual rate of 5 million.
January's reading was revised up to reflect a 0.8 percent rise in sales to an annual rate of 4.94 million.
The national median existing-home price was up 11.6 percent on the year to $173,600. This was the 12th straight monthly rise. The last time home prices were up for 12 months in a row was from June 2005 to May 2006.
The median time on market for all homes was 74 days, down 24 percent from a year ago.
"Job growth in the improving economy and pent-up demand are causing both home sales and rental leasing to rise. Though home prices are rising much faster than rents, historically low mortgage rates are still making home purchases affordable," said Lawrence Yun, NAR chief economist in a press release.
"The only headwinds are limited housing inventory, which varies greatly around the country, and credit conditions that remain too restrictive."
Total housing inventory was up 9.6 percent to 1.94 million existing homes at the end of February. This represents a 4.7-month supply of homes at current sales pace, up from 4.3 months in January.
Existing home sales account for a larger share of the market than new homes, and have outpaced new home sales. And with housing supply staying tight, a rise in existing sales should support home prices.