December housing starts dropped 9.9%, the Commerce Department said Jan. 17.
Starts fell to an annual rate of 999,000 units in December from a revised 1.1 million pace in November, which was the highest since November 2007.
Economists had forecast an annual rate of 985,000 in December, Bloomberg News reported.
"The housing recovery is firmly entrenched," Brett Ryan, U.S. economist at Deutsche Bank Securities, told Bloomberg News.
"As long as the labor market continues to progress along the path we expect, transactions [and] homebuilding should all continue to move steadily higher," Ryan said.
Single family-unit construction fell 7% to an annual rate of 667,000 units, while multifamily-unit construction dropped 14.9% to an annual rate of 332,000.
