WASHINGTON — Sales of existing homes fell in December for the third consecutive month in a surprisingly sharp drop that signaled the housing market is cooling off faster than expected.

Home resales declined 5.7 percent from November to a seasonally adjusted annual pace of 6.6 million, the slowest since March 2004, the National Association of Realtors said yesterday. Western states, notably California, suffered the worst, with home sales in the region skidding 11.4 percent from November and from December 2004.

"We got to 6.6 sooner than I expected. I hadn't expected that for two or three months," said David Lereah, chief economist for the association, who conceded that his forecast for 2006 might now be too optimistic. He had predicted sales of existing homes would drop 5 percent this year, from a record 7.07 million in 2005. The rise in home prices, meanwhile, will slow to 6 percent this year from 12.7 percent in 2005, he projected.

Home buyers shelled out $211,000 for a median-priced home in December, an increase of 10.5 percent from the year before. But rising mortgage rates are pricing many would-be buyers out of the market, Lereah said.

The average rate on a 30-year fixed mortgage was 6.27 percent in December, up from last year's low of 5.53 percent in July. The Mortgage Bankers Association predicted Wednesday that the average 30-year fixed loan would hit a high of 6.4 percent in the second half of this year and stay there until the end of 2007.

That's bad news, in particular, for buyers in California, where prices have skyrocketed. The median price there for a single-family home was $548,430 last month, up 15.6 percent over a year earlier. Many people can afford to buy a home only with a riskier adjustable-rate or interest-only mortgage.

Leslie Appleton-Young, chief economist for the California Association of Realtors, had been projecting over the past 18 months that the market would slow. Now that it has, the drop is deeper than she expected.

In addition to higher mortgage rates, Appleton-Young blamed high oil prices and weak consumer confidence for the cooling of California's housing market.

But after the feeding frenzy in the California market for most of last year, the recent trend has restored sanity to the home-buying process, said Lisa Strong, an agent for Lyon Real Estate in Sacramento. "There are no fights anymore" among competing buyers and their agents, she said.

In the South, sales of existing homes dropped 7.2 percent, and sales slipped 2.6 percent in the Midwest, from November levels. Sales were flat in the Northeast.

"They were disappointing, clearly, but not a catastrophe," said Phillip Neuhart, an analyst for Wachovia. "You have to put this into perspective: 6.6 million is historically a high level. We're expecting a soft landing. We're not expecting a crash."