Sales of existing single-family homes fell 17% in December to an annualized rate of 5.45 million units with distressed purchases accounting for almost one-third of the activity, according to new figures released by the National Association of Realtors (NAR).

Compared to December 2008, existing home sales actually rose 15%. However, NAR noted that the inventory of unsold homes rose 11% to a 7.2 month supply rate in December.

Even though the supply rate rose, inventory fell to 3.29 million existing homes. (The monthly supply figure is calculated by the sales rate.)

Sales fell the most in the Midwest (-26%) and the least in the West (-5%). NAR is warning that with inventory trending downward, buyers might need to "move quickly" if the spring home buying season heats up.

NAR chief economist Lawrence Yun said the housing market is "going through a period of swings driven by the tax credit." (The $8,000 first-time homebuyer tax credit was extended from November 30 to April 30.) In December the median price of a home was $177,500, 1.4% higher than a year ago.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.