Although new home sales rose for the second straight month in December, sales for all of 2006 suffered their largest decline in 16 years, reported the Associated Press.

According to the U.S. Commerce Department, sales last month rose by 4.8 percent, following a 7.4 percent increase in November. Total sales for 2006, however, were down 17.3 percent from 2005. This was the largest decline since a 17.8 percent drop in 1990.

The slowdown in housing sales comes after sales of new and existing homes set records for five consecutive years. Analysts predict that the housing market will continue to drag during the first half of 2007.

The downturn cut into Countrywide Financial Corp.’s fourth-quarter profits. The biggest U.S. mortgage lender reported that its net income declined 2.7 percent to $621.6 million from $638.9 million a year earlier, according to Bloomberg News. The company handled 9 percent fewer new mortgages last quarter.

These results have led the company’s CEO, Angelo Mozilo, to cut jobs to help trim $500 million in annual expenses, and the company has been in talks with Bank of America Corp. about a joint venture in mortgages.