Other articles by Martin Crutsinger:

Stimulus money more likely to be saved rather than spentMay incomes surge, but savings outpace spendingHousing construction, permits hit record lowsDisappointing April retail sales send stocks downRetail sales drop unexpectedly in AprilDurable goods, new home sales better than expectedTreasury says about $110B left in bailout fundIMF: Losses from global credit crisis mountingMarch housing construction falls 10.8 percentRetail sales fall unexpectedly in March

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WASHINGTON — The slump in housing deepened in the final three months of last year with sales falling in 40 states and median home prices declining in nearly half of the metropolitan areas surveyed, a real estate trade group reported Thursday.

The National Association of Realtors report showed that the biggest declines were in former boom areas.

The biggest percentage decline occurred in Nevada, a drop of 36.1 percent in the sales pace in the final three months of 2006 compared with the same period in 2005.

In other former boom areas, Florida saw sales drop by 30.8 percent, in Arizona sales were down 26.9 percent and they fell 21.3 percent in California.

The Realtors survey showed that sales were down in every region in the fourth quarter while prices fell everywhere except the West, where they rose 0.4 percent.

The Realtors said that while sales declined in the fourth quarter in 40 states, six states showed increases and one state, Utah, had an unchanged sales pace. Three states did not report enough data to make comparisons. Nationally, sales declined by 10.1 percent in the fourth quarter of 2006 compared to the same period a year ago.

The median price of a new home, the midpoint where half the homes sold for more and half for less, was $219,300 in the fourth quarter of last year, a drop of 2.7 percent from the same period a year ago.

Median home prices fell in 49 percent of the 149 metropolitan areas surveyed in the fourth quarter, compared with the same period a year ago. That was the largest percentage of metro areas reporting price declines since the Realtors began tracking price data in 1979.

David Lereah, chief economist for the Realtors, said he believed the data show that housing, which had enjoyed a five-year boom, was bottoming out in the final three months of last year.

"This information confirms 2006 was the year of contraction, and hopefully the fourth quarter was the bottom," Lereah said. "When we get the figures for this spring, I expect to see a discernible improvement in both sales and prices."

But Mark Zandi, chief economist for Moody's Economy .com, predicted that home prices in many parts of the country would continue to be under pressure for the rest of this year as the market works through still-large inventories of unsold homes. He said this process will be made more difficult with banks raising lending standards because of concerns about rising mortgage-default rates.

"The price declines we are seeing are extraordinarily broad-based and just symbolize how significant a price correction we are in," Zandi said.

Before 2006, housing enjoyed a lengthy boom with sales of both new and existing homes setting records for five straight years.

But big declines in sales and construction last year turned housing from one of the economy's stars to a major drag, which subtracted more than a percentage point from overall growth in both the third and fourth quarters.