WASHINGTON (Reuters) - U.S. housing starts rose more than expected in December as groundbreaking for single-family homes hit its highest level in more than 6-1/2 years, in a hopeful sign for the sluggish housing market recovery.
Starts increased 4.4 percent to a seasonally adjusted annual pace of 1.09 million units, the Commerce Department said on Wednesday. November's starts were revised up to a 1.04
For all of 2014, groundbreaking increased 8.8 percent to 1.01 million units, the highest since 2007. Economists polled by Reuters had forecast starts rising to a 1.04 million-unit pace from November's previously reported 1.03 million-unit rate.
Housing has lagged an acceleration in economic growth as tepid wage gains sideline first-time buyers from the market and force many young adults to stay at home with parents or share lodgings with relatives and friends.
The resulting weak household formation, in particular, has hurt residential construction. Higher house prices, mortgage rates and stringent lending practices by financial institutions have also been a constraint.
Single-family homes starts, the largest part of the market, jumped 7.2 percent to a 728,000-unit pace, the highest level since March 2008. Groundbreaking on single-family projects in the West hit a seven-year high, while starts in the Midwest were
the highest since December 2011.
Groundbreaking in the volatile multi-family homes segment fell 0.8 percent to a 361,000-unit pace.
Permits for future home construction fell 1.9 percent to a 1.03 million-unit pace. Permits have been above a 1 million-unit pace since July.
Single-family permits rose 4.5 percent to their highest level since January 2008, while multi-family permits tumbled 11.8 percent.
(Reporting by Lucia Mutikani; Editing by Paul Simao)