December housing starts up 4.4%; homebuilder stocks rise

Housing starts rose 4.4% in December as the still-sluggish home building industry ended its best year since 2007.

New residential construction rose to an annualized rate of 1.09 million, the Commerce Department said Wednesday. That's higher than expectations of about 1.02 million to 1.04 million units and November's 1.04 million pace. A boost in single-family homes was responsible for December's gain.

New home permits fell 1.9% from November, to a seasonally adjusted 1.03 million. But single-family home construction climbed 7.2% from November to the highest rates since early 2008.

Overall, new home construction was up nearly 9% over 2013, to an average of 1.01 million homes. But the pace of single-family construction remains well below 2005's 2.07 million homes.

Builders rose in tandem with the Commerce Dept. report, including Toll Brothers, up 0.8% to $33.45; Pulte Group, up 1% to $21.01 and Lennar, up 2% to $43.27.