India, Jan. 17 -- After reporting significant increases in new residential construction in the two previous months, the Commerce Department released a report on Friday showing U.S. housing starts saw an even more substantial spike in the month of December.

The Commerce Department said housing starts skyrocketed by 16.9 percent to an annual rate of 1.608 million in December after jumping by 2.6 percent to a revised rate of 1.375 million in November.

The surge came as a big surprise to economists, who had expected housing starts to rise by 0.7 percent to a rate of 1.375 million from the 1.365 million originally reported for the previous month.

With the much bigger than expected increase, housing starts soared to their highest level since...