After reporting significant increases in new residential construction in the two previous months, the Commerce Department released a report on Friday showing U.S. housing starts saw an even more substantial spike in the month of December.
The Commerce Department said housing starts skyrocketed by 16.9 percent to an annual rate of 1.608 million in December after jumping by 2.6 percent to a revised rate of 1.375 million in November.
The surge came as a big surprise to economists, who had expected housing starts to rise by 0.7 percent to a rate of 1.375 million from the 1.365 million originally reported for the previous month.
With the much bigger than expected increase, housing starts soared to their highest level since hitting a rate of 1.649 million in December of 2006.
Meanwhile, the report said building permits tumbled by 3.9 percent to an annual rate of 1.416 million in December after climbing by 0.9 percent to a revised rate of 1.474 million in November.
Building permits, an indicator of future housing demand, had been expected to slide by 0.9 percent to a rate of 1.468 million from the 1.482 million originally reported for the previous month.