U.S. housing starts and permits declined in December after rebounding in November, as the steady housing recovery seen through most of 2015 lost momentum in the last month. The starts data was largely below market expectations.

Data released by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau showed that housing starts declined 2.5% to a seasonally adjusted annualized rate of 1.15 million units in December from the revised November reading of 1.18 million.

Single-family housing starts declined 3.3% in the month, while multi-family starts went down 3.4%. However, housing starts went up 6.4% year over year.

The number of building permits — a gauge of future constructions — went down 3.9% in December from the prior month due to slump in multi-family permits. Building permits for single-family grew 1.8%, while those for multi-family homes dropped 13.5%. However, permits surged 14.4% year over year.

The much-lower-than-expected starts/permits data came a day after numbers released by the National Association of Home Builders (NAHB) showed that homebuilders’ sentiment index remained steady at 60 in January. Nonetheless, the index has remained in the low 60s for eight months now, indicating that overall housing recovery is on track.

Notwithstanding the softer December numbers, 2015 was more or less a good year for the housing market, possibly the best since 2007 when the housing recession set in. Full-year housing starts rose 10.8% while permits rose 12% year over year.

After a lull in the U.S. housing market in the first quarter, sales picked up in the ensuing months supported by improving economic environment and better employment picture. Job and wage growth, a recovering economy and improving consumer confidence, moderating home price gains, affordable interest/mortgage rates, rising rentals, rapidly increasing household formation and a limited supply of inventory, point to a continued strong demand in 2016.