updated 1/18/2007 11:58:35 AM ET 2007-01-18T16:58:35

The pace of U.S. home construction climbed 4.5 percent in December, a second-straight monthly increase that ran contrary to analyst expectations.

But for all of 2006 the rate of new home building posted the biggest decline in 15 years, a government report on Thursday showed.

The Commerce Department said housing starts closed out the year at an annual pace of 1.642 million units in December compared to 1.572 million units in November.

Economists had forecast December housing starts to fall to 1.560 million units from November’s originally reported pace of 1.588 million units.

For all of 2006 housing starts totaled about 1.8 million, that was down 12.9 percent from the 2005 total, the biggest decline since 1991.

Building permits, which offer a clue to future construction plans, rose 5.5 percent to a 1.596 million unit pace.

Economists were expecting building permits would register a 1.500 million unit pace, close to the 1.513 million unit figure reported for November.

Permit applications for the year were down 14.9 percent, the biggest decline since 1990.

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