Homebuilders picked up the pace on new projects in December, lending weight to projections of further growth in 2015.
Builders broke ground on new residences at a seasonally adjusted annual rate of 1.09 million in December, an increase of 4.4 percent month-over-month and 5.3 percent year-over-year, the Commerce Department reported Wednesday.
Housing starts came in at an annualized rate of 1 million or higher in six of 2014's 12 months. For the entire year, the government estimates homebuilders started on 1.01 million new units, making 2014 the first year since 2007 that starts topped the 1 million mark.
The yearly results line up with the latest builder confidence readings from the National Association of Homebuilders (NAHB), which reported Tuesday that its sentiment gauge slipped one point in January to a still-positive reading of 57. A confidence reading above 50 indicates builders think the market is in good shape as a whole.
NAHB Chief Economist David Crowe said the group expects the momentum of the last few months to carry into 2015.
"A growing labor market and strengthening economy will spur steady growth in single-family housing production in the year ahead," Crowe said.
Crowe isn't the only one projecting gains in the year ahead. In a recent survey of economists, the Wall Street Journal found that the average forecast for housing starts this year is 1.17 million, a 16 percent increase.
All of December's increase in homebuilding came on the single-family side, which saw a 7.2 percent month-over-month increase to a rate of 728,000 units. Builders began work on multifamily buildings at a rate of 361,000, down slightly from November.
Permits for new housing construction fell from month to month, dropping 1.9 percent to an adjusted annual rate of 1.03 million, the Commerce Department said. Compared to a year ago, December permit numbers were up 1.0 percent.