New construction of US homes rose sharply in December, led by a surge in the key single-family house sector, government data shows.

Private housing starts leaped 4.4 per cent from November to an annual rate of 1.089 million, the Commerce Department said stated. That was well above the 1.040 million pace expected by analysts.

For all of 2014, housing starts were up a solid 8.8 per cent from 2013, at a rate of almost 1.006 million, the best level since 2007.

November starts were revised up to 1.043 million from the prior estimate of 1.028 million.

Single-family homes, which account for the majority of home building, were up 7.2 per cent in December. Starts on multi-family units fell 4.2 per cent.

For the year, single-family starts rose 4.9 per cent and multi-family starts advanced 17.1 per cent from 2013.

Building permits, an indicator of future construction, fell 1.9 per cent in December to an annual rate of 1.032 million. They rose 4.2 per cent year-over-year in 2014.

The housing market’s recovery from a crash in 2006-2007 slowed last year, with home prices registering smaller gains and tight credit conditions on mortgages blamed for limiting sales, despite historically low interest rates.