New U.S. single-family home sales fell more than expected in January, a government report showed on Thursday.

The Commerce Department said sales tumbled 12.6% to a seasonally adjusted 284,000 unit annual rate after a downwardly revised 325,000-unit pace in December.

Economists polled by Reuters had forecast new home sales sliding to a 310,000-unit pace last month from a previously reported 329,000 unit rate.

Compared to January last year sales were down 18.6%. Sales surged in December as buyers in California rushed to take advantage of the tax credit for new homes. 

A glut of foreclosed houses on the market is putting pressure on new home sales, forcing builders to drastically scale back on construction projects.

Data on Wednesday showed sales of previously owned homes were the highest in eight months in January, but were driven by a surge in purchases of distressed properties.

At Januarys sales pace, the supply of new homes on the market rose to 7.9 months worth from 7.0 months worth in December. 

The median sales price for a new home fell 1.9% last month from December to $230,600. Compared with January last year, the median price was up 5.7%.