The rate at which building permits were issued in November reached a four-year high, indicating the housing recovery will extend into 2013.
Housing starts fell 3% to an 861,000 annual rate but permits rose 3.6% to an 899,000 annual rate.
The average start rate from September to November was the strongest since the three months ended August 2008.
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Gains in housing will offset the reluctance of businesses to invest because of concern over the fiscal cliff.
Failing budgetary discussions are still weighing on the stock markets and the global economy is still struggling.
The Commerce Department revised down October’s housing starts numbers from the previously reported 894,000 to an 888,000 annual rate.
So far this year, starts are up 27.1% in 2012 compared with the first 11 months of 2011.
Construction of single-family homes fell 4.1% to a 565,000 annual rate and work on multi-family housing fell 1% to an annual rate of 296,000.
Applications for multi-family projects jumped 10.6% in November to a 334,000 annual rate.
among homebuilders increased in December for the eighth consecutive month.