Hitting their highest level since December 2006, housing starts ballooned 16.9% month-to-month in the latest report. Multifamily starts registered a 29.8% increase, which is a 33-year high and single-family starts grew 11.2%, the biggest jump since July 2007.

 
Starts rose in all four regions in December, some outstandingly so: the Midwest posted +37.3% in overall starts, +56.5% in single-family starts; the Northeast registered +25.5% in overall starts; the South, which only saw a 9.3% advance in overall starts, is up 53% in recent months.

Permits, however, did not perform well with single-family down 0.5% and multifamily down 9.6%. And while the gap between multifamily permits and starts narrowed in December, it remains unusually large with the trend in permits well above the trend in starts.

Additionally, the NAHB index, a measure of homebuilder optimism, fell in January to 75, but that is just shy of the 20-year high hit in December.

The Wells Fargo Economic Group stated that, "Big jumps like this are not unusual for December. The seasonal adjustment factors for the month are huge and unseasonably mild weather, as we had this past December, can often lead to exaggerated jumps in the seasonally adjusted data. There is also a tendency for multifamily starts to surge at year-end, as developers race to get projects started ahead of new mandates that tend to begin at the start of each year (but) if December's strong numbers stand up, single-family starts will slightly exceed our 2019 forecast and multifamily starts, most of which are high-end lifestyle apartments, will significantly exceed our expectations. (However) it is not uncommon for big gains in housing starts to be scaled back when more complete data are reported. Yet even if we see December's gains trimmed, the trend of the preceding three months suggests that homebuilding has begun 2020 with strong momentum."