Analysts had expected home resales to fall to a 6.25 million-unit pace from the 6.28 million-unit rate initially reported for November.
The national median home price of existing homes was unchanged from a year earlier, holding at $222,000.
"The blood-letting in housing continues, although at a lessening pace -- on trend," said T.J. Marta, a fixed-income strategist at RBC Capital Markets. "Despite the downside surprise, this data series supports the notion that the trough in housing and overall U.S. growth is past, having occurred in Q3 '06."
For all of 2006, home sales slipped 8.4%, the sharpest decline since 1982, when they fell 17.7%.
Some Weakening Of Labor Market
The Labor Department said 325,000 workers filed new claims for state unemployment insurance benefits in the holiday-shortened week that ended Jan. 20, up from a revised 289,000 claims a week earlier.
It was the largest one-week rise in claims since a 96,000 increase in the week ended Sept. 10, 2005, but analysts said the number of claims was still consistent with recent trends.
"There is little in the latest jobless claims to suggest any major shifts in labor market conditions," said Brian Dolan, director of FX research at Forex.com.
A Labor Department spokesman said there were no special factors behind the increase, but noted that seasonal factors associated with year-end holidays were still at play.
The number of new claims was far higher than the 310,000 anticipated by private economists after an original reading of 290,000 in the week ended Jan. 13.
The four-week moving average of new claims -- viewed as a more accurate indicator of labor conditions -- also rose, climbing to 309,250 in the week ended Jan. 20 from 307,750 the
The number of people who remained on the benefit rolls after drawing an initial week of aid fell 39,000 to 2.48 million in the week ended Jan. 13, the latest week for which figures are available.
Claims have been running at a rate that is considered to reflect a healthy hiring environment as overall economic growth has not slowed as much as expected.
Factory Activity In Kansas City Area Cools
Meanwhile, manufacturing activity in the Federal Reserve Bank of Kansas City's district cooled a bit in January, according to a report from the bank.
The bank's production eased to 5 in January from 7 in December. Readings above zero indicate expansion of activity.
The shipments index rose to 16 from 8 the prior month, its highest level since June.
The new order and order backlog indices on a year-over-year basis dropped to their lowest levels in almost 3 years and the capital expenditures index decline to 13 from 28 was a two-year low.
The Kansas City Fed district includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico and western Missouri.
Federal Reserve policymakers will be casting an eye toward the Labor Department's monthly employment report scheduled for release on Feb. 2.
In a preliminary survey, Wall Street analysts predict the economy will generate 140,000 jobs in January, fewer than the 167,000 created in December, and that the jobless rate will be
unchanged at 4.5%.
The Fed has been keeping a close eye on both employment and the housing market.
The latest read of the housing market underscores the sharp contraction that has occurred in the once high-flying housing market. Before last year's decline, the housing market had set sales recoreds for the previous five-straight years.