The Department of Housing and Urban Development, or HUD, credited government programs designed to move homeless people into permanent housing.
"HUD and local communities are increasingly providing permanent housing solutions and breaking a vicious cycle of homelessness for those who have lived on the streets as a way of life," department Secretary Alphonso Jackson said in a statement.
The department says people are chronically homeless if they have been continuously living on the streets for a year or more, or if they have been homeless at least four times in the past three years. They also have a disability, often mental illness, or substance abuse.
The number of chronically homeless people dropped from 175,900 in 2005 to 155,600 in 2006, according to data collected from about 3,900 cities and counties.
Earlier this year, the housing department estimated there were 754,000 homeless people on a given night in January 2005. The overall estimate for 2006 is expected early next year.
The homeless are difficult to count, though HUD started requiring housing agencies to try in 2005. The agencies are required to count their local homeless populations every other year, although about 60 percent do it annually.
The 2006 estimate for people who were chronically homeless was based on annual data from agencies that conduct the counts each year.
Advocates for the homeless said they expected a decrease on the national level, given the government's increasing emphasis on permanent housing instead of temporary shelters.
"In the past few years, there has been a significant investment in ending chronic homelessness, both in time and resources," said Mary Cunningham, director of the Homelessness Research Institute at the National Alliance to End Homelessness.
"Communities across the country are really working hard on this issue," she said. "It would be a major disappointment if the numbers were not going down."
HUD has been shifting resources from emergency shelters to transitional and permanent housing for years. The number of emergency shelter beds dropped by 35 percent from 1996 to 2005, to 217,900, while the number of beds in permanent housing for the homeless increased by 83 percent, to 208,700.
The department spent $287 million last year on programs that serve people who are chronically homeless, creating 4,000 permanent housing units, the agency said.