The U.S. Commerce Department said Thursday that builders broke ground on a seasonally adjusted annual rate of 954,000 homes in December. That was 12.1 percent higher than November's annual rate.
June 2008 was the last time housing starts cracked 1 million.
In the wake of the housing market collapse, new construction dried up over the latter part of the last decade. There were some improvements in 2011 and a stronger recovery in 2012, according to the federal data.
Builders started on 780,000 homes in 2012, which was 28.1 percent above 2011.
Single-family starts in December were at a rate of 616,000. That was up 8 percent from November, the Commerce Department said.
On housing completions, the seasonally adjusted annual rate in December was 686,000, which was 1.6 percent above November and 13.2 percent higher than December 2011.
An estimated 651,400 housing units were completed in 2012. That was up 11.4 percent over 2011.
Residential building permits also were up in December. The seasonally adjusted annual rate was 903,000 compared with 900,000 in November and 701,000 in December 2011, the Commerce Department said.
Permits also began a steep descent in the summer of 2008. December was the highest month since July 2008.