WASHINGTON (Reuters) - U.S. homebuilding and permits surged in December as historically low mortgage rates supported the housing market, but momentum could slow amid surging lumber prices and a shortage of labor. Housing starts jumped 5.8% to a seasonally adjusted annual rate of 1.669 million units last month, the Commerce Department said on Thursday. Economists polled by Reuters had forecast starts would rise to a rate of 1.560 million units in December. Homebuilding increased 5.2% on a year-on-year basis. Starts totaled 1.380 million in 2020, up 7.0% from 2019. Permits for future homebuilding accelerated 4.5% to a rate of 1.709 million units in December. Permits, which typically lead starts by one to two months, totaled 1.452 million last year, a 4.8% increase from 2019. Single-family homebuilding, the largest share of the housing market, soared 12.0% to a seasonally adjusted annual rate of 1.338 million units. Single-family starts have increased for eight straight months. Though the housing market and manufacturing remain the economy’s stars performers, the relentless COVID-19 pandemic is hurting the availability of labor at construction sites as sick workers stay at home. A survey on Wednesday showed a dip in confidence among single-family homebuilders in January. Builders complained about “supply-side constraints related to lumber and other material costs, a lack of affordable lots and labor shortages that delay delivery times and put upward pressure on home prices.” Softwood lumber prices surged 52.2% on a year-on-year basis in December, according to data from the Labor Department. The housing market is being underpinned by cheaper mortgages and an exodus from city centers to suburbs and other low-density areas as companies allow employees to work from home and schools shift to online classes because of the pandemic. About 23.7% of the labor force is working from home. Lower-wage earners in the services sector have borne the brunt of the coronavirus crisis. Single-family building permits raced 7.8% to a rate of 1.226 million units in December. Homebuilding is being supported by lean inventories, especially for previously owned homes. The 30-year fixed mortgage rate is around an average of 2.79%, according to data from mortgage finance agency Freddie Mac. Starts for the volatile multi-family segment tumbled 13.6% to a pace of 331,000 units. Building permits for multi-family housing projects fell 3.0% to a pace of 483,000 units. Rising rental vacancy rates are a challenge for the multi-family housing market. The pandemic has also seen renters moving away from city centers to suburban apartments in search of a more outdoor lifestyle.