WASHINGTON (Reuters) - Groundbreaking to build new homes accelerated in December to its fastest pace in over four years, supporting the view that housing is poised to provide a substantial boost to the U.S. economy.

The Commerce Department said on Thursday that starts at building sites for homes surged 12.1 percent last month to a 954,000-unit annual rate.

Data for U.S. housing starts can be volatile and is sometimes subject to large revisions. The government revised downward its estimate for November housing starts to a 851,000-unit rate from the originally reported 861,000.

Some of the strength in December's reading for starts came from a 20.3 percent surge in multi-family unit construction. That component is especially volatile.

Wednesday's report nonetheless builds on a trend in growth that has led many analysts to expect residential construction boosted the economy last year for the first time since 2005.

December's pace of groundbreaking was the fastest since June 2008.

This year, home building is expected to provide stronger support to economic growth, which would partially counter the drag expected from tighter fiscal policy as Washington works to shrink the federal budget deficit.

Permits for future home construction edged higher to a 903,000-unit rate, the quickest since July 2008.

The housing market has regained some footing after a historic collapse that helped push the economy into its worst recession since the Great Depression.

Last month, groundbreaking for single-family homes, the largest segment of the market, climbed 8.1 percent last month to a 616,000-unit pace.

(Reporting by Jason Lange; Editing by Neil Stempleman)