Groundbreaking for U.S. single-family homes rose in December to the highest level in more than 6 1/2 years and permits surged, in a hopeful sign for the housing market recovery, Reuters reported. 

The U.S. Commerce Department said today that single-family housing starts, the largest part of the market, jumped 7.2 percent to a seasonally adjusted annual pace of 728,000 units – the highest level since March 2008.

That gain offset a 0.8 percent fall in groundbreaking for the volatile multifamily homes segment, lifting overall housing starts 4.4 percent to a 1.09 million-unit rate last month.

A strengthening labor market, low interest rates, improving mortgage availability and growing pent-up demand will help to significantly boost single-family housing production in the year ahead and move the housing recovery to higher ground, according to economists who spoke Tuesday at the International Builders’ Show in Las Vegas, according to a release from the National Association of Home Builders.

“The signs point to a more robust year for housing,” said David Crowe, chief economist for the association. “Household balance sheets are returning to normal levels, homeowners’ equity is increasing and significant pent-up demand is rising. More than 7 million existing home sales were postponed or lost during the downturn; and while some are lost forever, we should see some catch-up.”

According to the NAHB, single-family production is expected to rise 26 percent in 2015 to 804,000 units, still below a normal level of 1.3 to 1.4 million single-family starts; multifamily starts are expected to rise 2 percent to 358,000 units; and residential remodeling is expected to register a 3 percent gain. Sales of single-family houses is expected to increase 29 percent to 564,000.