After reporting a steep drop in new residential construction in the previous month, the Commerce Department released a report on Friday showing housing starts in the U.S. rebounded by much more than anticipated in the month of January.
The Commerce Department said housing starts soared by 9.7 percent to an annual rate of 1.326 million in January after tumbling by 6.9 percent to a revised 1.209 million in December.
Economists had expected housing starts to climb by 3.5 percent to an annual rate of 1.234 million from the 1.192 million originally reported for the previous month.
With the much bigger than expected rebound, housing starts reached their highest annual rate since hitting 1.328 million in October of 2016.
The jump in new residential construction was partly due to a spike in multi-family starts, which shot up by 23.7 percent to an annual rate of 449,000.
Single-family starts also climbed by 3.7 percent to a rate of 877,000 in January after plunging by 10.6 percent to a rate of 846,000 in December.
Building permits, an indicator of future housing demand, also surged up by 7.4 percent to an annual rate of 1.396 million in January from the revised December rate of 1.300 million.
The jump surprised economists, who had expected building permits to edge down to a rate of 1.300 million from the 1.302 million originally reported for the previous month.
With the unexpected increase, building permits reached their highest annual rate since hitting 1.407 million in June of 2007.
Multi-family permits surged up by 26.5 percent to a rate of 530,000, more than offsetting a 1.7 percent drop in single-family permits to a rate of 866,000.
Compared to the same month a year ago, housing starts in January were up by 7.3 percent, while building permits were up by 7.4 percent.
On Thursday, the National Association of Home Builders released a separate report showing homebuilder confidence remained at a healthy level in the month of February.
The report said the NAHB/Wells Fargo Housing Market Index came in at 72 in February, unchanged from January and in line with economist estimates.