The U.S. Commerce Department released the housing market data on Friday. Housing starts in the U.S. rose 9.8% to 1.174 million annualized rate in June from a 1.069 million pace in May, missing expectations for a rise to 1.110 million. May's figure was revised up from 1.036 million units.

The increase was driven by an increase in starts of multi-family homes.

Building permits in the U.S. climbed 7.4% to 1.343 million annualized rate in June from a 1.250 million pace in May. May's figure was revised down from 1.275 million. It was the highest level since July 2007.

Analysts had expected building permits to decline to 1.150 million units.

Starts of single-family homes rose 0.9% in June. Building permits for single-family homes rose 0.9%.

Starts of multifamily buildings jumped 29.4% in June. Permits for multi-family housing soared 15.3%.

Housing market activity may accelerate this year due to the improvements in the labour market.