Sales of new homes unexpectedly fell 7.6 percent last month, capping the industry's weakest year on record.
The Commerce Department says December sales fell to a seasonally adjusted annual rate of 342,000 from an upwardly revised November pace of 370,000. Economists surveyed by Thomson Reuters had forecast a pace of 370,000 for December.
The results were the weakest since March and indicated demand remains sluggish despite newly expanded tax incentives to spur sales.
Only 374,000 homes were sold last year, down 23 percent from a year earlier and the weakest year on records dating back to 1963.
The median sales price of $221,300 was down nearly 4 percent from $229,600 a year earlier, but up about 5 percent from November's median of $210,300.