Sales of new U.S. homes fell unexpectedly in December, ending the homebuilding industry's weakest year on record, the government reported Wednesday. The Commerce Department said new-home sales fell 7.6 percent to an annual rate of 342,000 last month from November's pace of 370,000. The results were the worst since last March and indicated that demand remains weak despite government tax incentives to spark sales. Only 374,000 new homes were sold last year, down 23 percent from a year earlier and the weakest year on records dating from 1963. December's sales were almost 9 percent below a year earlier. Home sales have struggled to recover from their four-year decline. December's sales pace was up 4 percent from the bottom hit in January 2009, but down 75 percent from the peak in July 2005. December's median price rose 5 percent from the previous month but was still down 4 percent from a year ago. Experts believe that any housing recovery this year will be slow and difficult. The National Association of Home Builders forecasts sales of new and previously owned homes to weaken after tax credits for homebuyers expire in April. Still, new-home sales are expected to rise by more than one-third from last year's extremely weak levels.
