Builders began work on new homes at a seasonally adjusted annual rate of 1.678 million units last month. The rate was up from a revised 1.579 million rate in December.
The last time the pace of new starts was faster was in February 2000. Builders broke ground at a 1.745 million rate.
Building permits rose 3.1% in January to a 1.706 million seasonally adjusted annual rate, up from a 1.654 million rate in December. This was the highest rate since January 2001.
Regionally, housing starts increased 14.4% in the South to a pace of 800,000.
Starts increased by 8.7% in the Northeast. In the West and the Midwest, housing starts fell by 3.6% and 0.3%, respectively.
Starts on single family homes rose 3.5% to a seasonally adjusted annual pace of 1.345 million units. Multi-family starts rose 8.3% to 287,000 units.