The Commerce Department reported on Wednesday the housing starts fell by 3.6 percent m-o-m in January to a seasonally adjusted annual pace of 1.567 million, while building permits surged by 9.2 percent m-o-m to an annual rate of 1.551 million (the highest level since March 2007).

Economists had forecast housing starts decreasing to a pace of 1.425 million units last month and building permits rising to a pace of 1.450 million units.

Data for December was revised to show homebuilding growing to a pace of 1.626 million units, instead of increasing at a rate of 1.608 million units as previously reported.

According to the report, permits for single-family homes, the largest segment of the market, increased 6.4 percent m-o-m to a rate of 987,000 units in January (the highest level since June 2007), while approvals for the multi-family homes segment jumped 14.6 percent m-o-m to a 564,000 unit-rate.

In the meantime, groundbreaking on single-family homes declined 5.9 percent m-o-m to a rate of 1.010 million units in January, while housing starts for the multi-family rose 0.7 percent m-o-m to a 557,000 -unit pace.