US housing starts dived almost 10 per cent in December from a five-year high but maintained robust growth for the year as the housing market recovers.

New residential construction fell to a seasonally adjusted annual rate of 999,900 in December, pulling back from the upwardly revised November pace of 1.1 million, the highest level in five years, the US Commerce Department reported on Friday.

The December starts number was better than expected. Analysts on average had forecast a steeper decline to 986,000.

“The month-to-month decline of 9.8 per cent doesn’t quite reverse the strong November gain,” said Celia Chen of Moody’s Analytics. “Winter storms may have caused some of the retrenchment.”

In the fourth quarter, starts averaged 1.0 million, compared with 882,000 in the third quarter.

“Through the volatility, starts appear to be trending up again after some stalling a few months ago, but to be confident of that we would like to see further gains in the housing market index and home sales,” said Jim O’Sullivan of High Frequency Economics.

Building permits, a sign of potential future housing construction, fell 3.0 per cent from November to an annual rate of 986,000, the Commerce Department said. The reading came in weaker than the 1,000 estimate.

On a year-over-year basis, December housing starts were up 1.6 per cent and building permits were up 4.6 per cent.

The full year 2013 data underlined the strength of last year’s housing market recovery following the 2006 collapse of a price bubble.

The department estimated there were 923,400 starts in 2013, the strongest pace since 2007 and 18.3 per cent higher than in 2012.

Building permits at 974,700 were also at a six-year high and up 17.5 per cent from 2012.