The U.S. economy expanded at a slightly stronger pace at the end of last year than earlier estimated, meanwhile readings on home sales and consumer confidence hinted trouble ahead in 2006.

The U.S. Commerce Department said today that gross domestic product rose at a 1.6% annual rate in the fourth quarter, better than the earlier reported 1.1% growth. Stronger inventory building by businesses bolstered growth, but consumer outlays, which account for two-thirds of U.S. economic activity, rose just 1.2%, well below the third quarter’s 4.1% advance.

However, the housing market, which has provided a boost to economic growth for several years running, is beginning to show signs of slowing down. The latest evidence came today in a report from the National Association of Realtors showing sales of existing homes fell 2.8% in January to a seasonally adjusted annual rate of 6.56 million units. Sales of condominiums and co-ops were particularly weak, falling 10.6%.

Home prices held steady, with the median price at $211,000, unchanged from December. The inventory of existing homes for sale rose to 5.3 months, compared with December’s unrevised 5.1 months, the NAR said.

Also today, the U.S. Conference Board said its index of consumer confidence for February fell to a reading of 101.7 compared with the revised 106.8 seen in January. The present-situation index, a gauge of consumers’ views of current conditions, rose modestly to 129.3 from 128.8 the prior month, but expectations for the state of economic activity over the next six months declined to 83.3 from 92.1 in January.