Builders broke ground on new homes and apartments at a seasonally adjusted annual rate of 596,000 units, a 14.6 percent jump from December.
Single-family homes, which make up nearly 70 percent of new construction , fell 1 percent to an annual rate of 417,000 units. Apartment construction skyrocketed 80 percent to an annual rate of 171,000 units.
Building permits, an indicator of future construction, fell more than 10 percent in January. Code changes in California, Pennsylvania and New York caused an artificial spike the month before.
Last year, builders worked on 587,600 new homes, just barely better than the 554,000 started in 2009. In a healthy economy, builders start about 1 million units a year. The housing industry is coming off the worst two years for home construction dating back to 1959.
More than a year after the recession ended, the housing market is still struggling.
Millions of foreclosures have forced home prices down and more are expected this year. Tight credit has made mortgage loans tough to come by. And some potential buyers who could qualify for loans are hesitant to enter the market, worried that prices will fall further.
The flat-lined housing market is weighing on the overall economic recovery. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.
Single-family home construction was uneven across the country, falling 12.8 percent in the Northeast and 7.7 percent in the South. It jumped 5.4 percent in the West and 25.5 percent in the Midwest.
The trade association reported Tuesday that its index of builder confidence remained stuck at 16 in February, where it has been for four straight months. A reading of 50 signifies a positive outlook about the future.