Washington -- U.S. builders started work on new homes in December at the fastest pace in seven months, a sign housing escaped the slowdown in retail spending that caused manufacturing to slump.

A surge in construction of single-family homes caused housing starts to increase 0.3% last month to an annual rate of 1.575 million units, the U.S. Commerce Department said. The December pace was the fastest since 1.591 million in May. Analysts had expected a 3.3% decline.

Starts of single-family homes rose 6% in December to a 1.313 million-unit pace that was the fastest since 1.327 million in March. December starts of multi-family homes fell 20.8% to a 262,000-unit annual rate, following an 11.4% increase in the previous month.