WASHINGTON--Sales of new U.S. homes rose 5.7% in December and set a record for the year, according to the Commerce Department.

New homes were sold at a seasonally adjusted annual rate of 946,000 in December, up from a revised 895,000 pace in November, the Commerce Department said.

The sales level for the entire year was 900,000 units. This rate is 2.6% above the 877,000 volume for 2000. The annual figure is the highest since the government began keeping track in 1963.

Last month sales of new homes rose more than 35% in the West. In the Midwest, sales of new homes decreased 9.6%. In the Northeast and the South, sales dropped 1.4% 1.1% respectively.