Sales had fallen 3.8 percent in December and 1.8 percent in November, leading to worries that the housing recovery could be losing momentum.
The big January gain was likely to ease those concerns. Many economists believe sales of both new and previously occupied homes will rise in 2014, helped by an improving economy and job gains which will boost the number of people working.
The median price of a new home sold in January was up 3.4 percent from a year ago to $260,100.
The sales gain was led by a 73.7 percent surge in sales in the Northeast. Sales were up 11 percent in the West and 10.4 percent in the South. The only region to see a sales decline was the Midwest where sales fell 17.2 percent, likely a reflection of winter blizzards that hit the region.
Sales for all of 2013 rose to 428,000, the highest point in five years and an increase of 16.3 percent from 2012.
Economists expect sales to grow more in 2014 although they do not expect the gain to be as robust as the 2013 increase.
Price increases are expected to moderate in 2014 as well. The Standard & Poor's/Case-Shiller 20-city home price index rose by a healthy 13.4 percent in 2013. That was the largest calendar gain in eight years.
Economists are looking for further sales gains as the economy continues to gain momentum and more people are able to get jobs. Further gains in home sales will spur more jobs in the construction industry and help to support economic growth.
The National Association of Realtors reported last week that sales of existing homes plummeted in January to an annual rate of 4.62 million units. That was down 5.1 percent from the December pace.
Freezing temperatures and snowstorms caused a slip in housing activity this winter while higher mortgage rates and higher prices had acted to slow growth earlier in the year.
The average rate on a 30-year mortgage rose to 4.33 percent last week, up from 4.28 percent the previous week. Rates surged about 1.25 percentage points from May through September, peaking at 4.6 percent. Those increases began after the Federal Reserve signaled last spring that it would expected to start slowing its bond-buying program before the end of the year.
Those Fed bond purchases were designed to keep long-term interest rates low to stimulate more borrowing and give the economy a boost. The Fed in December and January did announce $10 billion reductions in its bond purchases, taking them from $85 billion per month down to $65 billion per month.
It is expected as long as the economy and the job market keep improving, the Fed will keep reducing bond purchases in moderate steps until the program is phased out entirely at the end of this year.
The economy is also expected to show greater strength with many analysts expecting overall growth to climb to close to 3 percent this year, up from just 1.9 percent in 2013.