Home Construction at Fastest Pace Since 2008

New home construction jumped in December to its fastest pace since June 2008, the Commerce Department reported today.

"We're about halfway back so there's still plenty of room to grow, but we do think the underlying strength is there," said National Association of Homebuilders senior economist Robert Denk.

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The boost in new home building was spread throughout the country but the largest gains were in the South and West. This matches the pace of home prices, which are now rising fastest in areas hit the hardest by the sub-prime lending crisis.

According to another report released this morning by CoreLogic, 1.4 million homeowners who were underwater on their mortgage are now in "positive equity" thanks to rising home prices. Though there are still 10.7 million homeowners, or 22 percent of the country's total, who owe more on their homes than they are worth.

The housing market appears to be in an increasingly convincing recovery, which is good news for construction jobs and an important ripple effect for the entire economy.

"2012 was a great year for the housing market and we should see that continue in 2013," said Molly Boesel, senior economist at CoreLogic.

ABC Radio News' Richard Davies contributed to this report.