Helped by low mortgage rates, Americans snapped up new homes by 5.7 percent more in December, helping to make 2001 the best year on record for home sales, even as the country suffered through a recession.

A record 900,000 new single-family homes were sold last year, surpassing the record of 886,000 set in 1998, the Commerce Department reported Monday.

The National Association of Realtors reported Friday that 5.25 million existing homes were sold in 2001, an all-time high.

The country slid into recession in March and was dealt another blow by the Sept. 11 terror attacks. But the housing market, one of the economy's few bright spots, managed to hold up so well because of low mortgage rates, analysts say.

The average rate for a 30-year fixed-rate mortgage in 2001 was 6.97 percent, the lowest annual average rate since 1998.

Should the economy rebound this year as many economists predict, mortgage rates are also expected to rise.

For Americans who opted to buy a home last year, the benefit of low mortgage rates outweighed other negative factors, including rising unemployment, which hit a six-year high of 5.8 percent in December, and a volatile stock market, analysts said.

Appreciation in housing values and the resulting cash from a wave of home-mortgage refinancing has helped support consumer spending during the slowdown, Federal Reserve Chairman Alan Greenspan said last week. Consumer spending accounts for two-thirds of all economic activity.

To revive the economy, the Federal Reserve cut short-term interest rates 11 times last year, which had the effect of pushing down the prime interest rate - a benchmark for millions of consumer and business loans - to its lowest level since November 1965.

Many economists expect the Fed will hold rates steady at its meeting this week, especially since Greenspan last week told Congress that he see signs of a rebound.

The 5.7 percent increase in December pushed new-home sales to a seasonally adjusted annual rate of 946,000. That followed a 5.2 percent advance the month before.

All the strength in sales in December came from the West, where sales soared by 35.1 percent to a rate of 281,000. In the Northeast, sales dipped by 1.4 percent to a rate of 70,000. In the Midwest, they fell by 9.6 percent to a rate of 150,000 and in the South sales slipped by 1.1 percent to a rate of 445,000.

The rise in sales pushed up home prices. The median home sales price, meaning half sold for more and half for less, rose to $170,200 in December, up 4.5 percent from the month before.

For all of 2001, the median sales price increased to $174,100, a 3 percent advance from 2000.

The Associated Press contributed to this report.