US housing starts rise 4.4% in December, more than forecast by analysts

The Commerce Department's figures marked the highest level in more than six-and-a-half years and compares to November's 1.043m units.

"The December report paints a better picture for overall fourth quarter activity and is consistent with our view that the housing recovery continues, although it remains a choppy one and shallower than expected at the onset of 2014," Barclays Research said.

"We think that the recent decline in mortgage interest rates, as well as improvements in the labour market, and household income are likely to continue supporting the recovery in activity."