Groundbreaking to build new U.S. homes fell in January but new permits for construction rose to a 4 1/2-year high, reinforcing expectations the housing market will support economic growth this year.
The Commerce Department said on Wednesday that starts at building sites for homes fell 8.5 percent last month to a 890,000-unit annual rate.
The decline was due to a sharp drop in the volatile multi-family unit category, which fell 24.1 percent during the month.
Starts for single-family units, which comprised about two thirds of the total, edged up 0.8 percent to their highest level since July 2008.
Permits for future home construction rose to a 925,000-unit rate, the quickest since June 2008.
Data for U.S. housing starts can be volatile and is sometimes subject to large revisions. The government revised upward its estimate for December housing starts to a 973,000-unit rate, the fastest pace since June 2008.
The housing market has regained some footing after a historic collapse that helped push the economy into its worst recession since the Great Depression.
Home building added to national economic growth last year for the first time since 2005 and is expected to provide stronger support this year. That could help counter the drag expected from tighter fiscal policy as Washington works to shrink the federal budget deficit.