December housing starts dropped 16%, the largest decline since February 2011, the Commerce Department said Feb. 19.
Starts fell to an annual rate of 888,000 units in January from a revised 1.05 million pace in December.
Economists had forecast an annual rate of 950,000 in January, Bloomberg News reported.
"A lot of it is weather, obviously," Richard Moody, chief economist at Regions Financial Corp., told Bloomberg.
"The story is better job and income growth and you have all this pent-up demand. You're seeing household formation start to improve and inventories have been pared down," said Moody.
Single family-unit construction fell 15.9% to an annual rate of 573,000 units, while multifamily-unit construction dropped 16.3% to an annual rate of 307,000.
